Mubasher: Oil prices dropped on Wednesday, as the US posted a rise in its crude inventories last week, which came beyond expectations, while concerns regarding waning demand mounted again.
US Nymex futures lost 0.7% to $67.58 per barrel (pb) early on the day, from their last close, hovering near their a one-month low of $67.03 pb seen on Tuesday, while global benchmark Brent crude futures went down 0.6% to $71.73 pb, offsetting a $0.32 gain after reaching a three-month low.
Crude prices stabilised after large drops on Monday and last week on supply disruptions in Venezuela, while analysts expected a decline of 3.6 million barrels in US stockpiles for the week through 13 July.
However, prospects of oversupply quickly re-emerged after the American Petroleum Institute (API) on late Tuesday reported an increase of over 600,000 barrels.
The falling prices came ahead of official figures due to be released by US Energy Information Administration (EIA) later in the day.
Moreover, the mounting risks over trade disputes between Washington and Beijing could weigh on the global economic outlook, according to BMI.
“Despite US-China trade tensions, the economic outlook is broadly positive, but a number of headwinds are emerging, not least a stronger dollar, rising inflationary pressures and tightening liquidity,” the UK-based research company said, adding that the slowdown in trade activity will impact physical demand for crude with the shipping, road, and air transportation industries.
Uncertainty pertaining to Washington’s trade policy would hamper the economy, even with the minor impact of the recently introduced tariffs, head of Kansas City Federal Reserve Bank Esther George told Thomson Reuters, while she considered trade policy a “significant” risk to her outlook for economic growth.
By 7:32 am GMT, US Nymex futures fell 0.94% to $67.44 pb, as Brent crude futures dropped 1% to $71.44 pb.
This article provided by NewsEdge.