ISLAMABAD: Crude oil prices slumped on Wednesday as an unexpected increase in US crude inventories stoked concerns about fuel demand.
As of 1305 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, shed $0.68 (-0.79 percent) to reach $85.57 a barrel. Similarly, the West Texas Intermediate (WTI), the main oil benchmark for North America, went down by $0.59 (-0.72 percent) to $81.03 a barrel.
On the other hand, the price of Arab Light decreased by $0.87 (-0.99 percent) to reach $86.85 a barrel. Similarly, the price of Russian Sokol decreased by $1.08 (-1.35 percent) to $79.01 a barrel. On the other hand, the price for Opec Basket increased to $85.43 from $84.88 a barrel.
Crude oil prices ended flat last week as Brent inched up to $85.43 from $85.34 a barrel, showing an increase of $0.09 on a week-on-week (WoW) basis. However, WTI closed the week down to $80.63 from $81.04 a barrel, registering a weekly decrease of $0.41 (-0.51 percent).
The US crude stocks, an indicator of fuel demand, rose by 9.3 million barrels in the week ended on March 22, according to an American Petroleum Institute report cited by Bloomberg. Following a two-million-barrel expansion in the week that ended on March 15, research company Macquarie was expecting American crude stockpiles to fall by 1.3 million barrels last week.
The American Petroleum Institute also reported a 2.4 million barrel rise in crude stocks at the Cushing, Oklahoma storage centre, despite a reduction in petroleum stockpiles. Cushing, a key trading and storage centre, has a capacity of 90 million barrels and accounts for 13 percent of total US oil storage.
Oil prices have risen by about 11 percent since the beginning of the year due to Opec+ supply cuts and geopolitical uncertainty arising from Ukrainian drone attacks on Russian oil infrastructure.
The Opec+ alliance recently extended voluntary cuts of 2.2 million barrels per day into the second quarter to stabilise oil markets. The group will hold an online meeting on April 3 to review oil market conditions. A full ministerial gathering will be held in Vienna in June. Analysts say Opec+ may have to bring back some barrels to the market in the second half of the year to meet higher demand. – TLT
