Oil steadies on Wednesday after U.S. crude inventories rise less than expected

Zhitong Finance APP observed that oil prices were basically flat on Wednesday after government data showed that U.S. crude stockpiles rose less than expected, offsetting the impact of weak economic data released on Tuesday. Brent crude oil futures closed at $86.12 a barrel on Wednesday local time, down 1 cent per barrel, while WTI crude oil futures closed at $80.15 a barrel on the same day, up 2 cents per barrel. Benchmark Brent crude futures fell 2.3% on Tuesday, while WTI futures fell 1.8% after data showed U.S. business activity contracted for a seventh straight month in January, sparking fears of an economic slowdown.

Mizuho analyst Robert Yawger said: “After the end of the trading day, the market will start to increase concerns about economic recession and similar events, mainly due to the demand destruction caused by the economic slowdown.”

WTI prices briefly rose by more than $1 a barrel on Wednesday after U.S. crude inventories rose by 533,000 barrels last week to 448.5 million barrels, the Energy Information Administration (EIA) said. Some analysts expect the country’s crude oil inventories to increase by another 1 million barrels in the future.

“The market sees this stockpile expectation as somewhat supportive for oil price action,” said Phil Flynn, an analyst at Price Futures Group.

“If the increase in crude oil inventories is much lower than expected, it will raise concerns about the tight supply of crude oil. As the strategic oil reserve has been heavily drawn, the country usually does not have spare crude oil supply.”

It is reported that crude oil prices will rise in 2023, and the global benchmark Brent crude oil price this week broke through $89 a barrel for the first time since early December, mainly due to the increase in demand due to the liberalization of China’s epidemic prevention and control policies, and market expectations that the Federal Reserve will ease Slow down the pace of interest rate hikes.

Sources said on Tuesday that in terms of crude oil supply, since OPEC and its members may relatively recognize the current production levels of the organization’s member countries at a meeting on February 1, future crude oil production and market supply are expected to decline. maintain stability.

Source: Zhitong Finance Network