Singapore, May 8, 2024 – Oil prices extended their decline on Wednesday after a report of a surprise increase in US crude oil inventories. This news overshadowed positive sentiment surrounding anticipated production cuts by the Organization of the Petroleum Exporting Countries (OPEC).
Key Points:
- The price of US light crude oil (WTI) for June delivery fell by $1.22 to $77.16 per barrel.
- North Sea Brent crude oil for July contracts dropped by $1.19 to $83.47 per barrel.
- US crude oil inventories rose by 509,000 barrels, with gasoline and distillate stockpiles also increasing.
- OPEC is expected to announce production cuts at its upcoming meeting on June 1st.
Reasons for the Price Decline:
- The unexpected rise in US oil inventories suggests weaker demand.
- Recessionary fears in the US and China are putting downward pressure on commodity prices, including oil.
- A stronger US dollar against other currencies makes oil cheaper for investors holding other currencies.
Outlook:
Oil prices are likely to remain volatile in the coming days, reacting to news on demand, supply, and macroeconomic conditions. While the anticipated OPEC production cuts could stabilize or slightly increase oil prices, growth might be limited by recessionary concerns.
