Oil Prices Head Lower on US Inventory Pressure

OIL INVENTORY REPORT – After the Energy Information Administration reported the first reduction in crude stocks in four weeks, oil trading weakened.

On the last trade session of the US Crude Oil WTI Futures it traded at $63.80. Meanwhile, Brent Oil futures were at $71.61 untouched.

Higher than the previous 1.2 million-barrel drop of crude stockpiles, forecast by the market said it fell by 1.4 million barrels last week.

In three previous weeks, crude inventories had built by roughly 17 million barrels.

Reports by EIA showed a decline of 1.17 million barrels lower than the expected 2.13 million barrels on the gasoline inventories.

Compared to the 0.85 million predicted falls, 0.36 million barrels tumbled on the distillate stockpiles below the expected drop.

OPEC and its Allies’ Contract in Cutting Oil Output

This year, an arrangement was reached by the Organization of the Petroleum Exporting Countries and its allies, oil prices have been backed. It is a part of the OPEC and its allies’ strategy in reducing oil output by 1.2 million barrels per day since the beginning of 2019.

Recent reports suggest Russia is unwilling to extend current production cut agreement, but decision on continuing the curb in production will be approved in June.

The steady economic growth in China backs the oil market.

Official data showed on Wednesday that Chinese economy grew 6.4% in the first quarter, higher than the analyst’s expectation of 6.3%

Progress of the trade talks between China and the U.S. is being watched carefully by traders, as the two belong to the world’s biggest oil importers.

News report cited the two sides aim to reach a trade deal in early May.

Announcement by the two countries on striking a deal is anticipated by administrators and Chinese Vice Premier Liu He looks forward to traveling to Washington in the first week of May for discussions.