Oil prices fall despite data showing decline in US crude oil inventories
Date
11/14/2024 2:05:06 AM
(MENAFN) Oil prices showed a decline in early trading on Thursday, despite the release of unofficial data from the American petroleum Institute (API) that indicated an unexpected drop in US crude oil inventories last week. This surprising reduction in inventories added to the uncertainty surrounding the outlook for oil prices in the coming days. The market is trying to digest these mixed signals, with traders cautious about the future trajectory of crude prices.
The drop in oil prices on Thursday followed a recovery on Wednesday, when prices rebounded after hitting two-week lows. This was largely attributed to the Organization of the Petroleum Exporting Countries (OPEC) reducing its forecast for global oil demand growth. The OPEC downgrade contributed to the initial pessimism in the market, but prices managed to find support towards the end of the day.
Despite these mixed fundamental signals, the oil market has also been impacted by the strength of the US dollar. The dollar reached its highest level in seven months, which generally leads to higher oil prices for foreign buyers. A stronger dollar increases the cost of purchasing, transporting, and insuring oil for importers, thus influencing global oil demand dynamics.
By 4:00 a.m. GMT on Thursday, Brent crude futures for January delivery had fallen by USD0.4 per barrel, or 0.6 percent, to USD71.85, while West Texas Intermediate (WTI) crude futures for December delivery were down by USD0.5 per barrel, or 0.65 percent, at USD76.98. This followed a slight increase in both benchmarks at the close of trading the previous day, where Brent crude rose by USD0.4 to USD72.28 and WTI increased by USD0.31 to USD68.43, as the market reacted to the ongoing uncertainty.
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