Adedapo Adesanya
By Adedapo Adesanya
Crude oil prices edged lower on Wednesday as a surprise build in US crude inventories offset expectations of tight crude supply for the rest of the year, with Brent futures going down by 18 cents to $91.88 per barrel and the US West Texas Intermediate crude (WTI) dropping 32 cents to $88.52 per barrel.
The US Energy Information Administration (EIA) reported an inventory build of 4 million barrels for the week to September 8, in contrast to the draw of 6.3 million barrels for the previous week, which in turn followed another massive inventory decline of 10.6 million barrels for the week before that.
Those large draws were made during peak demand season, and there is a chance that inventory draws may moderate or possibly even reverse as demand declines seasonally.
The American Petroleum Institute (API) inventory report showed an unexpected build in crude oil, to the tune of 1.17 million barrels, for the week of September 8.
This is a change as traders have always focused on supply, with concern about a potential slowdown in demand in some large consumers taking the back seat.
Prices have recently found support from the latest production control announcements from Russia and Saudi Arabia; a shutdown of oil terminals in Libya amid a storm has contributed to a perception of tighter supply.
Meanwhile, Libya’s four oil export ports reopened on Wednesday following their closure in the face of Storm Daniel, which swept through the Mediterranean, causing extensive damage in Libya’s east, where officials are reporting over 5,000 deaths.
On Wednesday, the Libyan National Oil Company (NOC) confirmed that the eastern oil export ports of Ras Lanuf, Zueitina, Brega and Es Sider had all been reopened, with the exception of one mooring at Es Sida, which had been closed the week prior for maintenance.
While production was not affected, markets feared the removal of some 1 million barrels from export volumes as a result of Libya’s port closures.
Forecasters expect the European Central Bank (ECB) to raise interest rates at its meeting on Thursday.
The International Energy Association (IEA) fourth-quarter world crude oil demand growth forecast was revised down by 600,000 barrels per day.
The Organization of the Petroleum Exporting Countries (OPEC) on Tuesday stuck to its forecasts for robust growth in global oil demand in 2023 and 2024.
