Oil prices are declining on Wednesday morning after reports of a record two-year increase in US inventories of the fuel last week.
The cost of March futures for Brent crude oil on London’s ICE Futures exchange fell by $0.77 (0.96%) to $79.33 a barrel by 7:10 a.m. compared to the value at the close of trading the previous day. Those contracts rose 45 cents (0.6%) to $80.10 per barrel on Tuesday.
The price of WTI futures for February at electronic trades on the New York Mercantile Exchange (NYMEX) is $74.34 a barrel by that time, down $0.78 (1.04%) from the previous session. The contract rose by 49 cents (0.7 percent) to $75.12 a barrel at the end of last session.
Previous day’s report of American Petroleum Institute (API) showed that U.S. inventories climbed by 14.9 million barrels on January 6, following a decline over the past two weeks. The increase was the highest since February 2021.
Traders are now waiting for official data to be released by the Energy Department on Wednesday at 5:30 p.m. Analysts polled by Trading Economics predict that the Energy Department data will point to a 2.24 million-barrel decline in oil reserves. The survey was conducted before the API data was released.
The day before the oil market was supported by expectations of growth in demand for fuel in China as the last restrictions were canceled. At the same time, investors are concerned about the growing number of infections of coronavirus in the country.
“We are confident that oil prices will go back up after the peak of COVID-19 infection in China has passed and economic activity is accelerating,” said Carsten Fritsch, a commodity market analyst at Commerzbank.
The price of March futures on London’s ICE Futures exchange fell by $0.77 (0.96%) to $79.33 per barrel by 7:10 a.m. from the close of trading the day before. Those contracts rose 45 cents (0.6%) to $80.10 per barrel on Tuesday.
The price of WTI futures for February at electronic trades on the New York Mercantile Exchange (NYMEX) is $74.34 per barrel by that time, down $0.78 (1.04%) from the previous session. The contract rose by 49 cents (0.7 percent) to $75.12 a barrel at the end of last session.
Previous day’s report of American Petroleum Institute (API) showed that U.S. inventories climbed by 14.9 mln barrels on January 6 following a decline the previous two weeks. The increase was the highest since February 2021.
Traders are now waiting for official data to be released by the Energy Department on Wednesday at 5:30 p.m. Analysts polled by Trading Economics predict that the Energy Department data will point to a 2.24 million-barrel decline in oil reserves. The survey was conducted before the API data was released.
The day before the oil market was supported by expectations of growth in demand for fuel in China as the last restrictions were canceled. At the same time, investors are concerned about the growing number of infections of coronavirus in the country.
“We are confident that oil prices will go back up after the peak of COVID-19 disease in China and the acceleration of economic activity,” – said a commodity market analyst at Commerzbank Karsten Fritsch.
