Oil prices fell during trade today, Thursday, October 12 (2023), amid fears of a slowdown in demand, posting a third consecutive day of losses.
During today’s session, oil markets were hit by a larger-than-expected increase in crude and gasoline inventories in the United States and declining supply concerns.
Yesterday, Wednesday, October 11, oil prices ended trading down 3% on the release of US expectations for demand in 2023 and 2024.
Oil price today
By 05:59 GMT (Makkah time 08:59 AM), Brent crude futures – for December 2023 delivery – were down 0.51% at $85.38 a barrel.
Meanwhile, US West Texas Intermediate crude futures – for November 2023 delivery – fell 0.68% to $82.92 a barrel, according to figures seen by the specialist energy site.
Both crude oil benchmarks rose more than $3.50 in late trading on Monday, amid growing concerns about a conflict for oil-rich regions. This affected oil prices, but they were lower in the Tuesday and Wednesday session.
The US Energy Administration raised its oil price forecasts in 2024, voluntarily cut production in Saudi Arabia, and upgraded estimates of US crude production in 2023.
The firm estimates that the average price of West Texas Intermediate crude will reach $90.91 per barrel in 2024, up 9.2% from the September 2023 forecast of $83.22 per barrel.
Oil price analysis
U.S. crude stockpiles rose by about 12.9 million barrels, citing data from the American Petroleum Institute on Wednesday.
That was more than an increase of 500,000 barrels expected by analysts in a survey by the agency. Reuters.
“American Petroleum Institute inventory numbers are unlikely to help sentiment this morning,” ING analysts said in a note to clients. “Lower refinery operating rates due to maintenance may have contributed to this rise.”
The data showed gasoline inventories rose by 3.6 million barrels, a stark contrast to the 800,000-barrel decline expected by analysts, and continued concerns about slowing fuel demand in the United States.
“Fuel prices may be closer to consumers’ pain threshold than inflation-adjusted prices, as there are already signs that consumers have responded by reducing fuel use,” JPMorgan analysts said in a note to clients.
Markets await additional inventory data from the US Energy Information Administration scheduled for release at 03:00 PM GMT (6:00 PM Makkah Time).
Oil is required
Elsewhere, market concerns about the supply situation in the Middle East continued to ease; This has led to downward pressure on oil prices.
“Crude oil prices extended their losses amid signs that the impact of the war between Israel and Hamas on the oil market will be limited,” ANZ analysts said in a note to clients.
The ING analysts added: “The risk premium continues to be eroded with the ongoing conflict with Israel and Hamas.”
However; The US Energy Information Administration’s expectations of a further decline in global oil inventories in the second half of 2023 limited the weakness in oil prices.
The Energy Information Administration said in a monthly report that inventory declines are expected to keep global oil supplies below consumption, which is likely to boost oil prices.
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