Oil prices fell today, Wednesday, to add slightly to their losses in the previous session, as a result of an increase in US crude stocks and fears of a global recession, which offset the impact of optimism about a recovery in demand in China.
Crude oil prices have risen this year amid China ending anti-Corona virus restrictions, and hopes that the Federal Reserve (the US central bank) will stop raising interest rates soon.
However, some analysts said that the speed of recovery in actual demand in China appears uncertain.
“The return of oil prices to the upside will depend on how quickly demand for crude oil in China recovers this quarter,” said Stephen Brennock of BVM Oil Brokerage.
“In the meantime, the focus is shifting to the state of US oil inventories,” he added.-
Brent crude fell six cents to $86.07 a barrel, after falling 2.3% in the previous session. US West Texas Intermediate crude fell 40 cents, or 0.5%, to $79.73, after falling 1.8% on Tuesday.--
The decline in prices came as a result of a report released Tuesday that US crude stocks rose by about 3.4 million barrels in the week ending January 20, according to market sources citing data from the American Petroleum Institute.
Concerns about an economic slowdown also affected oil prices. Data on Tuesday showed US business activity contracted in January for the seventh month in a row.
Oil supply is supposed to remain stable in the medium term, as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, the group known as OPEC +, are expected to maintain production quotas.
Yesterday, Tuesday, five sources in OPEC + said that the OPEC + committee is likely to endorse the current oil production policy of the group of producers when it meets next week, as there is a balance between hopes for an increase in Chinese demand and concerns about inflation and the global economy.