Oil Prices Steady Amid Mixed Economic Signals
Oil prices steadied on Wednesday after earlier gains, influenced by an unexpectedly large draw in U.S. crude stockpiles, tempered by economic concerns from China and the euro zone.
By 0925 GMT, Brent crude futures had edged up by 7 cents, or 0.08%, to $86.31 per barrel. U.S. West Texas Intermediate crude futures increased by 5 cents, or 0.06%, to $82.86 per barrel.
Market Dynamics and Inventory Data
On Tuesday, both benchmarks reached their highest levels since late April but closed lower as concerns over Hurricane Beryl’s potential impact on Gulf of Mexico production eased.
Data from the American Petroleum Institute (API) revealed that U.S. crude oil inventories dropped by 9.163 million barrels for the week ending June 28, surpassing market expectations. However, gasoline inventories rose by 2.468 million barrels, while distillate stocks fell by 740,000 barrels.
“This decline in crude levels might have prevented a larger sell-off following the hurricane news,” noted PVM Oil analyst John Evans.
Analysts had predicted a 700,000 barrel draw in crude inventories, a 1.3 million barrel decrease in gasoline stocks, and a 1.2 million barrel reduction in distillates. The Energy Information Administration (EIA) is set to release its official weekly data later today at 1430 GMT.
Focus on Gasoline Demand
Traders are also keeping an eye on U.S. gasoline demand, which is expected to rise with the summer travel season and the Independence Day holiday. The American Automobile Association (AAA) forecasts that holiday travel will be 5.2% higher than in 2023.
Global Economic Concerns
Surveys showed China’s services activity grew at its slowest pace in eight months, with confidence hitting a four-year low in June due to slower new orders growth. Meanwhile, overall business growth across the euro zone also slowed sharply last month.
OPEC Production and Market Sentiment
A Reuters survey indicated that OPEC’s output rose for the second consecutive month in June, with increased supply from Nigeria and Iran offsetting voluntary cuts by other members and the wider OPEC+ alliance.
“OPEC+ reportedly increased production in June despite pledges to maintain quotas through the third quarter, coupled with ongoing concerns over a sluggish recovery in China, which sent bearish signals,” said Panmure Gordon analyst Ashley Kelty.
Investment Outlook
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