While markets were pricing on a rise of 1.33 million barrels, petrol stockpiles in the US increased by roughly 2.8 million barrels and distillate inventories increased by 5.1 million barrels. Concerns about consumption in the world’s largest oil user have been raised by the unexpected increase in fuel stockpiles, particularly given the spike in travel demand over the Memorial Day holiday this past weekend.
Oil prices dropped earlier in the day as a result of poor Chinese economic data. Chinese industries struggled to draw in demand from outside the country, while domestic consumption remained sluggish, causing exports to decline quicker than anticipated in May and imports to decline as well, albeit more slowly.
Oil Market
According to information released on Wednesday, refineries’ increasing inventory levels caused crude oil imports into China, the world‘s largest oil consumer, to reach their third-highest monthly level ever in May.
In addition, the Dollar declined as the likelihood of a Fed rate hike next week decreased, helping to boost prices. The price of oil decreases for customers using other currencies, increasing demand.
- US petrol and distillate stockpiles rise, raising concerns about consumption amid travel demand.
- Chinese economic data causes oil prices to drop.
- OECD predicts moderate global economic growth, 2.7% expansion, down from the March prediction.
As the full consequences of higher interest rates are realized, the Organisation for Economic Co-operation and Development predicted that global economic growth will only pick up moderately over the coming year. The organization forecasted the world economy will expand 2.7% this year in its most recent report, down from its March prediction of 2.6%.
In comparison to US West Texas Intermediate crude futures, which were up 79 cents, or 1.1%, to $72.53 a barrel, Brent crude futures closed up 66 cents, or 0.9%, at $76.95 per barrel, according to data from Reuters.
Both benchmarks increased by more than a dollar on Monday as a result of Saudi Arabia‘s voluntary decision to reduce output by an additional one million barrels per day in July.
