Adedapo Adesanya
By Adedapo Adesanya
The oil market traded mixed on Thursday as a large build in crude stockpiles in the United States outweighed expectations that US interest rates had peaked, with Brent growing by 18 cents to $86.00 per barrel and the US West Texas Intermediate (WTI) down by 58 cents to $82.91 a barrel.
The Energy Information Administration (EIA) reported an inventory build of 10.2 million barrels for the week to October 6, in contrast to the draw of 2.2 million barrels for the previous week, which, however, did not affect prices as expected because the EIA also estimated a substantial increase in fuel inventories, sparking concern about the health of demand.
Prices, meanwhile, have been volatile since the start of the week but were on the retreat on Thursday after the American Petroleum Institute (API) reported a crude inventory build of almost 13 million barrels for the week to October 6.
The massive estimated increase in inventories sent prices tumbling despite the war premium that the latest events in the Middle East have added.
Data on Thursday showed that US inflation was slowing, further supporting expectations that the Fed will freeze interest rate hikes next month.
The US consumer price index increased 0.4 per cent last month, supporting market expectations that the US Federal Reserve would not raise interest rates next month.
The Saudi energy minister Prince Abdulaziz and Russia’s deputy prime minister Novak once again reiterated the need to balance oil markets.
Prince Abdulaziz bin Salman said it was necessary to be proactive in bringing stability to the oil market, which had recently been hit by concerns that the Israel-Hamas war could disrupt supplies from the Middle East.
On his part, Mr Novak also reassured markets, saying the current oil price factored in the Middle East conflict and showed that the risk from it was not high.
He also said on Thursday that Russia will further ease its fuel exports ban if necessary after it lifted restrictions on pipeline diesel supplies last week.
Meanwhile, the International Energy Association (IEA) lowered its oil demand growth forecast for 2024, suggesting harsher global economic conditions and progress on energy efficiency will weigh on consumption.
In contrast, the Organisation of the Petroleum Exporting Countries (OPEC) stuck to its forecast for relatively strong demand growth next year, expecting it to reach 2.25 million barrels per day.
