After industry data revealed that U.S. crude stocks increased more than anticipated on Wednesday, oil prices dropped, though supply concerns limited losses. By 0635 GMT, December Brent oil futures were down $1.03, or 1.1%, to $92.49 per barrel after closing 26 cents higher the previous day.
The December contract for West Texas Intermediate (WTI) oil in the U.S. fell 75 cents, or 0.9%, to $84.57, erasing the previous session’s rise. In recent weeks, “the spectre of supply cutbacks has been outweighed by the potential of a global economic downturn and tighter monetary policy,” according to analysts from ANZ Research.
What Are the Possible Supply Ranges?
Market sources claim that U.S. oil stockpiles increased by around 4.5 million barrels on October 21. That exceeded the five experts surveyed, who had predicted an average build of approximately 200,000 barrels. Despite growing concerns about a worldwide recession that would reduce demand, prices continued to trade in a constrained range due to persistent supply issues. According to Stephen Innes, managing partner at SPI Asset Management, OPEC production cutbacks effective November and the new E.U. sanctions on Russian oil should be favorable for prices.
Innes noted that WTI purchasers are keeping an eye out for any more interventions by President Joe Biden before the U.S. midterm elections on November 8 about the big WTI-Brent differential in recent sessions.
To lower the high price of gasoline, Biden said last week that he would sell off the remaining portion of a record release from the country’s emergency oil stockpile by year’s end. The Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, collectively known as OPEC+, recently decided to reduce the oil supply. Despite this, the White House praised Saudi Arabia’s efforts to aid Ukraine in its struggle with Russia on Tuesday.