Oil prices fell during trading today, Thursday, in light of the continued impact of US inventories data, which recorded a strong jump last week.
Supply and demand
The Energy Information Administration said yesterday that US crude stocks jumped last week by 16.3 million barrels to 471.4 million barrels, the highest level since June 2021.
The increase, which was larger than expected, was mainly due to the revised data, which analysts said mitigated its impact on oil prices.
Prices also received support from the International Energy Agency’s expectation that demand for oil will rise by two million barrels per day in 2023, an increase of 100,000 barrels per day from last month’s expectations, to a record level of 101.9 million barrels per day, and that China is the source of 900,000 barrels per day of oil. The increase
The agency said that China will account for nearly half of oil demand growth in 2023 after easing Covid-19 restrictions.
The US Energy Department said earlier this week that it would sell 26 million barrels of oil from the Strategic Petroleum Reserve, in an operation that is likely to shrink reserves to the lowest level since 1983.
“Energy traders were expecting to hear news of (drawn) SPR compensation and not taking advantage of it to get more supplies,” said Edward Moya, an analyst at OANDA.
The US Department of Energy had considered canceling the sale for fiscal year 2023, after last year the Biden administration sold a record amount of 180 million barrels of reserves. But such a repeal would have required congressional action
Will the pressure on crude continue?
Analysts believe that oil will resume its upward trend in the coming period, supported by Chinese demand, based on estimates by the International Energy Agency.
In terms of trading, the US “NYMEX” crude futures for March delivery by 20:21 GMT decreased by 0.6%, to $78.1 per barrel.
Brent crude futures for April delivery fell 0.7% to $84.7 a barrel.