Oil prices fell during Wednesday’s trade yesterday, a session that saw prices rise and fall in varying proportions as U.S. inflation slowly rose on hopes that Russian oil would once again be pumped through European pipelines. Faster than expected.
However, concerns about demand and official US data yesterday, Wednesday, last week’s rise in oil stocks and decline in gasoline stocks led to volatility in the trade.
Brent crude was down 0.2 percent at $94.48 a barrel by 15:45 GMT. U.S. West Texas Intermediate crude futures were also down 0.61 percent at $89.96. Both contracts fell more than a dollar a barrel earlier in the session.
Hungarian energy group MOL said it would resume oil flows to Central Europe via the Drushpa pipeline once the group changed transport charges for using the Ukrainian pipeline. Demand concerns also weighed on prices, analysts said.
“Fears that demand will be undermined as a result of the economic slowdown are the biggest driver of prices at the moment and the main reason Brent crude is trading below $100 a barrel,” said Stephen Brennock, analyst at PVM. Reuters”.
Yesterday, the U.S. Energy Information Administration said that U.S. crude oil and distillate inventories rose last week, while gasoline stocks fell.
Crude oil inventories rose by 5.5 million barrels to 432 million barrels in the week ended August 5, compared with expectations of analysts polled by Reuters, which indicated an increase of 73,000 barrels.
Oil inventories at a distribution hub in Cushing, Oklahoma, rose by 723,000 barrels, Energy Information Administration data showed.
Gasoline stocks fell by five million barrels last week to 220.3 million barrels, while analysts’ expectations in a “Reuters” poll indicated a decline of 633,000 barrels.
Refinery stocks, which include diesel and heating oil, rose 2.2 million barrels to 111.5 million barrels, while they were expected to fall by 667,000 barrels.
Net imports of U.S. crude rose 231,000 barrels per day last week to 4.06 million barrels per day, the Energy Information Administration said.
Meanwhile, informed sources said yesterday, according to “Reuters”, that Saudi Aramco has notified at least four buyers in North Asia that it will supply them with the full amount of crude oil contracted for in September. Saudi Arabia, the world’s biggest oil exporter, raised official selling prices to Asian buyers to record levels for the month, despite falling refining margins.
A trader from Singapore said, “People get what they ask for. He added, “There are no cuts from Saudi Arabia, and nobody is asking for more because demand is weakening, but oil prices are very high.”
Profit margins at Asian refiners that process Dubai crude were $3.75 a barrel this week, up from $30.49 nearly two months ago.
The Organization of the Petroleum Exporting Countries and its allies, known as the OPEC group, have also decided to increase oil production from September, although the increase will be limited to 100,000 barrels per day.