Data from the commodity industry reveals that on Wednesday, the price of crude oil fell by 1%. This was due to a quantity jack in the supply of crude oil stockpiles in the United States of America.
Review from Brent futures shows that there was a 1% fall in the price of oil, representing an $85.52 a barrel decline in price. The west Texas intermediate (WTI) future dropped by 1.1%, representing an $83.70 fall.
Inventories of crude oil grew by 2.3 million barrels in one week, This was disclosed by the American petroleum institute data. This was an estimated 1.9 million barrel per day gain.
The major producers tighten on supply while the oil demand continues to increase, especially after the reduction of restrictions caused by the COVID-19 pandemic.
The industry storage of gasoline rose by 500,000 while distilled stock inclined by 1 million barrels.
Craig Erlam, a market analyst for OANDO stated that “Barring more bullish headlines, which is possible considering what we saw yesterday, we could see some profit-taking in Brent and WTI, which would be healthy for the market,”
He further explained that prices of Brent are beginning to look overbought due to the consistent rise in the price of oil and demand shift to coal and gas to generate power.
An oil broker Stephen Brennock stated that “The global oil market is still at risk due to not fully containing the coronavirus and its variants”
“However, a patchy recovery around the world from the worst health crisis in 100 years, has often led to doubts over the sustainability of oil prices.”
News Source: Rate Captain