Oil prices are declining due to the increase in US stocks
Last Updated on May 3, 2021
Global oil prices declined during the trading session today, Wednesday, in the European market, approaching its second daily loss in the last three sessions. This decline came as a result of renewed demand concerns in the United States, “the largest oil consumer in the world,” after an increase that exceeded expectations about commercial crude stocks in the country, according to data. Preliminary for the American Petroleum Institute.
Crude oil prices
West Texas Intermediate crude, “US crude”, fell by more than 0.5% until 09:50 GMT, to trade the price of a barrel around $ 62.70, from today’s session opening level at $ 63.07, and recorded the lowest price at $ 63.27 a barrel.
International crude “Brent crude” also decreased by 0.6% to the level of 66.14 dollars a barrel, compared to the opening level at 66.56 dollars, and reached early in the session the highest level at 66.80 dollars a barrel.
At the conclusion of trading on Tuesday, US crude oil was able to achieve gains of 1.8%, and Brent crude, the global price benchmark, also gained 1.3% in the third daily gain during the last four sessions, as prices received more support recently thanks to the hopes of demand in the United States and Europe.
US Stocks Report
The American Petroleum Institute announced, in preliminary data published on Tuesday, that commercial crude stocks in the United States rose by about 4.3 million barrels during the past week ending on the twenty-third of the current month of April, the second consecutive week’s increase, this exceeded the economic expectations that indicated an increase of 0.5 million barrels.
This comes as investors await, later today, the official data on stocks and production levels, which are the most reliable in the markets and clearly affect price movements, within the weekly report of the US Energy Information Administration, and expectations indicated a decrease in stocks by 0.9 million barrels.
Other than that, the very rapid spread of coronavirus cases in India, “the third-largest consumer of oil in the world,” and other countries such as Japan and Brazil cast doubts on near-term demand recovery and dampens market sentiment.
OPEC + efforts
The ministerial meeting of the “OPEC Plus” coalition concluded on Wednesday to proceed with the implementation of the increases that were approved during the meeting of the ministerial committee in charge of following up the agreement to reduce production early this month.
This agreement provides for a gradual increase in supplies starting from next May, with a total of 1.15 million barrels per day to be distributed over a period of three months, as an increase of 350 thousand barrels per day is scheduled in May, and a similar increase in June, and during the month of July an increase of 450 thousand barrels.
For its part, the Kingdom of Saudi Arabia, “the largest oil producer in OPEC,” said that it would also backtrack during that period from its voluntary reduction by one million barrels, which it had done since last February.
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