2023-08-16 19:19:38
Oil prices fell on Wednesday, weakened by a strong dollar and after falling US crude inventories but production at their highest in three years.
A barrel of Brent from the North Sea, for delivery in October, fell 1.69% to 83.45 dollars.
Its American equivalent, the barrel of West Texas Intermediate (WTI), for delivery in September, fell back below the 80 dollar mark at 79.38 dollars, falling by 1.98%.
“Investors have digested a mixed report on crude oil inventories from the EIA and concerns are growing over the outlook for global growth,” commented Edward Moya analyst at Oanda.
U.S. weekly commercial crude oil reserves fell by 6 million barrels, according to data released by the U.S. Energy Information Administration (EIA). This is more than what analysts expected, which led prices to rise a little during the session.
But prices changed direction as the EIA report was interpreted. Gasoline reserves have changed little, melting by only 300,000 barrels in the height of the summer travel season.
In addition, crude production hit a three-year high of 12.7 million barrels per day.
“The EIA report contained a bit of everything for supporters of an increase in the cost of barrels as for those who lean for a decrease”, added the analyst.
Moya pointed to “crude production hitting a post-pandemic high of 12.7 million barrels per day and demand for gasoline and distillates” as bearish factors.
For analysts at Energi Danmark, “concerns around the Chinese economy” remained “the main point of attention in the market at the moment”, eclipsing “bullish signals such as falling stocks in the United States and production cuts among OPEC+ exporting countries.
“China’s economic recovery will have to ride the waves and will experience a torturous progress, inevitably with difficulties and problems,” said Wang Wenbin, a spokesman for the Chinese Ministry of Foreign Affairs, on Wednesday.
From retail sales to industrial production, the country released a disappointing data slate earlier this week, even suspending the monthly release of its detailed youth unemployment figures.
Oil was also struggling against a strong dollar on Wednesday at 1.0876 dollars for one euro (+0.27%) around 7:10 p.m. GMT.
The US currency strengthened after the publication of the minutes of the Federal Reserve (Fed) which report “risks” of persistence of inflation. A strong greenback tends to weigh on prices as crude trades in dollars.
On the natural gas side, the Dutch TTF futures contract, considered the European benchmark, fell 4% to 37.25 euros per megawatt hour (MWh), shortly after climbing to 42.66 euros per MWh.
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