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Oil down with US stockpile build signaling low demand

17 April 2024 22:55 (UTC+04:00)
Oil down with US stockpile build signaling low demand

Oil prices declined on Wednesday, with data indicating lower demand in the US, the world's biggest oil consumer, outweighing supply concerns from tension in the Middle East, Azernews reports, citing Anadolu Agency.

International benchmark Brent crude traded at $89.72 per barrel at 11.13 a.m. local time (0811 GMT), a 0.33% fall from the closing price of $90.02 per barrel in the previous trading session.

The American benchmark West Texas Intermediate (WTI) traded at $85.02 per barrel at the same time, a 0.40% drop from the previous session that closed at $85.36 per barrel.

Prices declined during early Asian trade following the release of data reflecting bearish demand in the US.

The American Petroleum Institute late Tuesday announced an estimated increase of 4.09 million barrels in US crude oil inventories, against the market prediction of a draw of 1.6 million barrels.

Official statistics from the Energy Information Administration (EIA) will be released later in the day, and if a buildup in crude and gasoline stockpiles is revealed, prices are expected to fall further.

Uncertainty over when the US Federal Reserve (Fed) will start interest rate cuts continues to influence oil prices.

Analysts expect that the Fed will keep the policy rate unchanged in May, while the probability that the bank will start reducing interest rates decreased to 15% in June and 42% in July. The probability of the Fed's first interest rate cut in September is evaluated at 67%.

Meanwhile, concerns over the spread of the conflict in the Middle East, home to the majority of the world's oil reserves, hindered price declines.

Israel carried out an air attack on Iran's consulate building in Damascus on April 1. A total of seven people from the Iranian Revolutionary Guards Army, including two generals, died in the attack. On April 13, Iran launched an attack on Israel with hundreds of kamikaze unmanned aerial vehicles and ballistic and cruise missiles.

Tension in the Middle East increased on Monday as Israeli Chief of Staff Herzi Halevi declared that Israel would retaliate against the Iranian attack.

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