Oil Prices Stagnant in Asian Trade Amid US Inventory Build
Little Movement in Oil Prices
Oil prices remained largely unchanged in Asian trade on Thursday as concerns over a substantial increase in U.S. inventories overshadowed fears of supply disruptions in the Middle East. The market saw minimal movement due to the conflicting factors at play.
Volatile Crude Prices
Crude prices experienced significant fluctuations this week as the market grappled with uncertainty surrounding demand and potential disruptions in the Middle East. The ongoing conflict between Israel and Hamas has added to the unpredictability in the market, with little signs of de-escalation in the conflict.
Limited Gains in Crude
Despite a marginal increase in crude prices on Wednesday, the recent rally in crude appears to have lost momentum. The surge in U.S. supplies has dampened the potential for significant gains in crude prices, with expectations of record-high U.S. production offsetting any shortages from the Middle East.
Stagnant Prices
West Texas Intermediate crude for April delivery remained flat at $83.05 a barrel, while Brent crude rose by 0.1% to $77.38 a barrel by 21:38 ET (02:38 GMT).
US Inventory Data
Data from the American Petroleum Institute revealed a 7.2 million barrel increase in U.S. inventories for the week ending February 16, surpassing expectations. This marks the third consecutive week of inventory growth, indicating a well-supplied fuel market in the U.S.
Impact on Supplies
The build in inventories is expected to maintain strong supplies as numerous refineries resume production in the coming days. This is likely to further stabilize the market.
Anticipated Production Levels
The API data is a precursor to the Energy Information Administration’s report, which is expected to confirm record-high U.S. production levels of over 13 million barrels per day.
Market Concerns
Traders are apprehensive about sluggish demand following the Federal Reserve’s indication that it is in no rush to begin cutting interest rates. The bank’s concerns over inflation have also contributed to market unease, as higher rates can hinder economic activity and subsequently impact oil demand.
Global Economic Health
Key purchasing managers index (PMI) readings from major economies are awaited, with focus on the PMIs from the Eurozone and the United Kingdom, which are due to be released. These readings will provide further insights into the global economic landscape.
