Oil and petroleum prices came tumbling down during this Wednesday’s trading after the API reported another build-up. Traders are now also waiting for official data from the EIA that is due later in the day.
Oil bears were delighted as they made profit from the US stockpiles’ build-up.
West Texas Intermediate futures stumbled down 0.37% or 0.21 points this Wednesday. WTI crude oil barrels now costs around $57.02 in sessions.
WTI crude prices extended their losses from $57.25 to $56.86.
Meanwhile, Benchmark Brent oil futures stumbled further down by 0.52% or 0.33 points in today’s trading session. Brent oil barrels now trade for $62.62, jumping lower from their last close of $62.96.
The American Petroleum Institute reported a 4.3-million-barrel build-up in US crude stocks in the week ending on November 1. Oil and petroleum stockpiles are now at 440.5 million barrels as of reporting.
The build-up also came thrice as much as forecasted by experts of a 1.5-million-barrel increase.
The Organization of Petroleum Exporting Countries or OPEC itself already expected the buildup in oil and petroleum stocks. According to the group, non-OPEC stocks are expected to exceed the oil demand in the coming years.
This is, of course, a courtesy of the flood in US shale barrels.
In OPEC’s annual global crude market outlook observation, the group said that its market shares will eventually sink. The reporting piece was published yesterday, November 5, and it shows the estimates for the group’s cut.
The 14-member-bloc also slashed its global crude demand forecasts in 2024 and 2040.
In the report, OPEC’s new projection for global crude demand in 2024 went down by 104.8 million barrels per day. Meanwhile, its 2040 forecast was trimmed down to 110.6 million barrels per day.
Hardly enough, the group also acknowledges that the US shale producers will still flood market demands.
OPEC members predict that US crude supplies will rise by over 40% or 17 million barrels per day by 2025. An upward revision of almost 3.1 million barrels per day in OPEC’s own forecast last year.
This means OPEC’s shares in the global oil market could shrink to 32% from 35% by the year 2025. The group also expects its average to drop down to 32.7 million barrels per day in 2023.
The American Petroleum Institute’s report and OPEC’s forecast slash were not actually the main focus today in oil and petroleum markets.
In fact, the US oil inventory report data was largely overshadowed by the US-China trade war hopes.
Traders remain hopeful for possible breakthroughs on trade talks between the two economic beasts. The ongoing agonizing trade war between the United States and China have long dented the oil and petroleum market.
Moreover, the recent news about their dispute keeps price falls in check.
Just recently, Beijing is pushing Washington and the US President Donald Trump to roll back more tariffs. This is in part of the first phase of the US-China trade agreement, according to sources close to the situation.
A commodities analyst said that oil and petroleum investors are still taking cues from the trade talks and related news. And looking ahead, the oil market could have an upside potential to pick up in demand.