Oil rates drop following unforeseen surge in US crude inventories
Date
8/15/2024 4:41:49 AM
(MENAFN) Oil rates experienced a decline on Wednesday following a report that revealed an unexpected increase in US crude inventories. brent crude futures dropped by 41 cents, or 0.5 percent, settling at USD80.28 per barrel. Meanwhile, US West Texas Intermediate (WTI) crude futures saw a more substantial decrease, falling by over USD1 to USD77.32 per barrel. This drop in prices came amidst a period of heightened market sensitivity to geopolitical tensions in the Middle East, which had previously contributed to oil price volatility.
The US energy Information Administration (EIA) released data showing an unanticipated rise in US crude oil inventories. Specifically, the report indicated an increase of 1.4 million barrels, contrasting sharply with market expectations, which had anticipated a reduction of 2.2 million barrels. This surprising build in crude inventories alleviated some concerns that had been driving oil prices up due to fears of supply disruptions from potential conflicts in the Middle East.
In addition to the increase in crude inventories, the EIA report noted that gasoline and distillate stocks had declined more than anticipated. Despite these decreases, the overall surplus in crude inventories was significant enough to influence market sentiment and contribute to the drop in oil prices. The unexpected build in crude oil supplies overshadowed the reductions in gasoline and distillate stocks, impacting trading decisions.
Market participants had been closely monitoring the situation in the Middle East, where escalating tensions had raised concerns about potential disruptions to oil production and supply routes. However, as these concerns eased slightly, the impact on oil prices became more pronounced, reflecting the balancing act between inventory data and geopolitical developments.
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