Crude Oil Prices Edge Higher over U.S Demand Outlook
Prices of crude oil increased in the global commodity market on Wednesday as US crude inventories dropped, indicating a positive demand outlook.
Also supporting the price is OPEC+ assurance that no major supply boost is planned, easing fears of a glut amid concerns over a potential US government shutdown.
Brent crude was trading at $66.24 per barrel, up 0.36% from the previous close of $66.01. US benchmark West Texas Intermediate (WTI) increased by 0.33% to $62.45 from $62.24 in the prior session.
A projected decline in US commercial crude oil stocks supported upward pressure on prices.
The American Petroleum Institute (API), which issues forecasts ahead of official US data, said the country’s commercial crude stocks fell by about 3.67 million barrels last week compared to the previous week.
The fall signalled relatively strong demand in the US, the world’s biggest consumer, lending support to prices. US Energy Information Administration (EIA) will release the official inventory data later in the day.
Meanwhile, OPEC+ members Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman are expected to decide on their November production levels at their Oct. 5 meeting.
The group, which brings together the Organization of the Petroleum Exporting Countries (OPEC) and its allies, agreed last month to raise output by 137,000 barrels per day (bpd) in October.
Although market forecasts had pointed to a possible oversupply on expectations of increased output, OPEC’s secretariat dismissed these reports.
OPEC denied media reports that member countries would boost production by 500,000 bpd, calling the claims completely false and misleading.
On the demand side, uncertainty is growing in markets as the US federal government faces a shutdown due to a lack of consensus on a temporary budget bill before the start of the new fiscal year.
Failure to pass the bill in Congress, which is needed to keep federal agencies operating, would mark the first such shutdown since the 35-day government closure between December 2018 and January 2019.
US President Donald Trump said Tuesday that the government would likely shut down, adding that this could lead to large-scale layoffs among federal employees.
The Congressional Budget Office estimated that around 750,000 federal workers could be placed on unpaid leave if the government shuts down. #Crude Oil Prices Edge Higher over U.S Demand Outlook
