Singapore, Oct. 26 (BNA): Oil prices fell on Wednesday after industrial data showed US crude inventories rose more than expected, but losses were limited by supply concerns. Brent crude futures for December were down 72 cents, or 0.8%, at $92.80 a barrel by 03:30 GMT, after settling up 26 cents in the previous session.
US West Texas Intermediate (WTI) crude futures for December fell 48 cents, or 0.6%, to $84.84, reversing the previous session’s gains, Reuters reported.
“The potential for a global economic slowdown and monetary tightening outweighs the specter of supply cuts in recent weeks,” ANZ Research analysts said in a note.
US crude stocks rose by about 4.5 million barrels in the week ending Oct. 21, according to market sources citing figures from the American Petroleum Institute, an industry group.
That was higher than the expectations of five analysts polled by Reuters who, on average, expected an increase of about 200,000 barrels.
While rising crude oil inventories bolstered fears of a global recession that would slash demand, persistent supply constraints have kept prices trading in a narrow range.
“OPEC production cuts that take effect in November and new EU sanctions on Russian oil from December should be positive for prices,” said Stephen Innes, managing partner at SBI Asset Management.
Regarding the wide spread of WTI and Brent crude in recent sessions, Innes added that WTI buyers are watching for any further interventions by President Joe Biden ahead of the US midterm elections on November 8.
Biden announced a plan last week to sell the remainder of a record edition of the nation’s emergency oil reserves by the end of the year as he tries to bring down soaring gasoline prices.
The strong dollar also affected the market on Wednesday. The dollar index, which measures the greenback against six major peers, rose to 110.98 by 03:30 GMT.
A firmer dollar reduces the demand for oil because it makes crude oil more expensive for those holding other currencies.
Though moved by the recent decision of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, called the OPEC+ community, to cut oil production, the White House on Tuesday welcomed Saudi Arabia’s steps to help Ukraine in its war with Russia. .
Biden, who is facing criticism over rising inflation, warned that the Saudis would face consequences for coming along with Russia and agreeing to cut the supply of crude.
Meanwhile, official US inventory data from the Government’s Energy Information Administration is due on Wednesday at 14:30 GMT.
HF