Adedapo Adesanya
By Adedapo Adesanya
The Brent crude futures settled lower on Tuesday, losing $1.59 or 1.7 per cent to trade at $90.03 per barrel on fears of higher supply in the United States combined with an economic slowdown and lower Chinese fuel demand.
Also, the price of the United States West Texas Intermediate (WTI) crude depreciated yesterday by $2.64 or 3.1 per cent to sell for $82.82 per barrel.
China, the world’s top crude oil importer, indefinitely delayed the release of economic indicators originally scheduled to be published on Tuesday, indicating to the market that fuel demand is significantly depressed in the region.
The unusual delay comes amid the week-long congress of the ruling Communist Party, a twice-a-decade event that is an especially sensitive time in China.
The data for the third-quarter gross domestic product (GDP) has been highly anticipated after the world’s second-largest economy grew just 0.4 per cent in the second quarter from a year earlier.
Oil prices were also pressured by reports that the US government would continue releasing crude oil from reserves.
The administration of Mr Joe Biden plans to sell oil from the Strategic Petroleum Reserve in an effort to cool fuel prices before next month’s congressional elections.
President Biden has in the past complained about the oil industry for high energy prices, saying they are reaping bumper profits at a time when Americans are struggling with inflation.
White House chief of staff Ron Klain said on Twitter on Tuesday that Mr Biden would address rising prices on Wednesday but did not provide details.
His administration has also said it is studying more drastic options to lower consumer prices, such as limiting fuel exports.
The US SPR has fallen to 405 million barrels so far this year from 593 million barrels in inventory at the start of the year, according to official EIA data. It is the lowest amount of crude oil in the SPR inventory since June 1984.
Aside from the SPR release, another factor weighing on oil prices is the persistent fear of recession, which could sap oil demand.
Meanwhile, output in the biggest US shale oil basin is forecast to rise by about 50,000 barrels per day to a record 5.453 million barrels per day this month, the Energy Information Administration (EIA) said.
