Adedapo Adesanya
By Adedapo Adesanya
Crude oil prices extended their decline on Wednesday as the Energy Information Administration (EIA) report showed a larger-than-expected weekly US crude-supply increase of 5.7 million barrels.
Brent Crude, the global benchmark, fell from the $61 mark and was trading down at $60.16 per barrel, shedding $1.07 or 1.75 percent, while the US benchmark, West Texas Intermediate (WTI) Crude, on the other hand, was down by 65 Cents or 1.17 percent to trade at $54.89 per barrel.
This occurred as US Crude Inventories rose 5.7 million barrel from what was quoted at last week’s report for the week ended October 25.
Business Post had reported that crude supplies were forecast to increase by 2.5 million barrels, according to analysts polled by S&P Global Platts.
With this development, the US inventories are now at 438.9 million barrels, which means that it is now one percent above the five year average for this time of year, according to the EIA report released on early Wednesday.
On the other hand, the American Petroleum Institute (API) also released its data on Wednesday and it revealed a weekly fall of 708,000 barrels in crude inventories.
The oil market saw a different API figure from analysts’ expectations of an increase of 494,000 barrels but the API issued its figures to its members and showed that crude inventories fell by 708,000 barrels in the week ended October 25 to 436 million.
Meanwhile, continuous oil losses can also be pointed at the seemingly non-progressing US-China trade war talks between the world’s largest economies, which has continue to tell on global oil demand.
Both the United States and China were reported to be working on the first phase of the trade agreement but it may not be completed in time for leaders of the two nations to sign it November when they meet.
Oil prices are now relying on the Organization of the Petroleum Exporting Countries (OPEC) and other production allies including Russia who have cut oil output since January to support prices in a market on the brink of excess.
Analysts are also looking at an expected third cut in the US rate cut to support oil prices by bringing about demand for crude.
Oil prices may return to gains on Thursday looking at these measures.
