Oil prices eased on Wednesday after industry data showed U.S.
crude inventories unexpectedly rose last week, signaling a
potential hiccup in demand, though concerns over supply kept losses
in check, Trend
reports with reference to Reuters.
Brent crude futures fell 23 cents, or 0.2%, to $96.08 a barrel
at0323 GMT.
U.S. West Texas Intermediate crude futures declined 28 cents, or
0.3%, to $90.22 a barrel.
U.S. crude stocks rose by about 2.2 million barrels for the week
ended Aug. 5, according to market sources citing American Petroleum
Institute figures.
Analysts polled by Reuters had forecast that crude inventories
would rise by around 100,000 barrels.
Official government data is due on Wednesday at 10:30 a.m.
EDT.
“Whatever crude demand destruction that occurs from a weakening
global economy won’t be able to drag down oil prices much lower
given how low the supply outlook remains,” said Edward Moya, senior
market analyst at OANDA.
“Much attention is falling on Iran nuclear deal talks and that
could be a wildcard in providing much needed supplies.”
The European Union on Monday put forward a “final” text to
revive the 2015 Iran nuclear deal which would boost Iran’s crude
exports. A senior EU official said he expected a final decision on
the proposal within “very, very few weeks”.
Both oil benchmarks were volatile on Tuesday, both rising and
falling by more than $1 a barrel during the session, but they
settled slightly lower as investors weighed recessionary concerns
with news that some oil exports had been suspended on the
Russia-to-Europe Druzhba pipeline that transits Ukraine.
Ukraine halted oil flows on the Druzhba oil pipeline to parts of
central Europe because Western sanctions had prevented a payment
from Moscow for transit fees from going through.
Flows along the southern route of the Druzhba pipeline have been
affected while the northern route serving Poland and Germany was
uninterrupted.
The Czech Republic’s pipeline company MERO said it expected
Russian oil supplies through the Druzhba pipeline to the Czech
Republic to restart within several days.
Adding to supplies, the operator of the giant Kashagan oilfield
in Kazakhstan has started gradually restoring output after an
emergency shutdown last week caused by a gas leak. The Kashagan
oilfield produces about 300,000 barrels per day.
Though concerns over a potential global recession have weighed
on oil futures recently, U.S. oil refiners and pipeline operators
expect energy consumption to be strong for the second half of 2022,
according to a Reuters review of company earnings calls.
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