Oil Prices Dip as US Stock Rise, China Raises Import Quota
Prices of crude oil slipped on Wednesday as U.S stocks increased beyond expectation at the time when China raised import quota for refiners.
Brent fell to $75.53 per barrel and West Texas Intermediate crude declined to $71.19 at the same time. U.S. crude stocks reportedly rose 1.64 million barrels last week while Official U.S. government oil inventory data is due on Wednesday.
Oil prices finished yesterday stronger on the back of little fresh developments. Brent settled almost 2.4% higher on the day, taking it back above $76, ING commodities strategists said in a note.
Analysts noted that crude oil prices came under some pressure in early morning trading today, saying that yesterday’s strength was in response to the lack of any outcome from US Secretary of State, Antony Blinken’s, latest visit to Israel.
There had been hopes that following the killing of Hamas leader, Yahya Sinwar, there could be some de-escalation in the war, analysts said. On top of this, the market continues to wait for Israel’s response to Iran’s missile attack.
“The uncertainty around how this plays out would leave speculators hesitant to be too short the market, something speculators had been before this most recent escalation, due to demand concerns and a bearish 2025 outlook”.
Numbers from the American Petroleum Institute overnight showed that US crude oil inventories increased by 1.6 million barrels over the last week, a bit above the roughly 1 million barrel build the market was expecting.
Meanwhile, refined products saw draws with gasoline and distillate fuel oil inventories falling by 2 million barrels and 1.5 million barrels, respectively. The more widely followed EIA weekly report will be released later today.
The Chinese government increased the 2025 crude oil import quota for private refiners by 6% year-on-year to 257m tonnes (a little over 5.1m b/d), after keeping it unchanged for four consecutive years.
The higher quota comes as new refining capacity ramps up, while quotas could still be adjusted depending on demand and capacity. However, refiners that have not imported crude oil over the last two years will not be allocated any quotas. #Oil Prices Dip as US Stock Rise, China Raises Import Quota
