Oil Prices Dip on US Crude Stock Build, Fed Rate Cut
Oil prices fell as data indicate an unexpected increase in crude inventories in the US, the world’s biggest oil consumer. The bearish session in the global commodities market was supported by a 50 basis point rate cut by the US Federal Reserves.
Analysts see energy cost pressure easing gradually as the Fed slashed rate on Wednesday, the first easing cycle since 2022. Brent crude decreased to $73.28 per barrel. US benchmark West Texas Intermediate (WTI) declined 0.61% to $69.53 per barrel after closing at $69.96 in the prior session.
Data released by the American Petroleum Institute (API) showed an increase of 1.96 million barrels in US commercial crude oil inventories.
The build-up in inventory is against market expectation of a drop of 100,000 barrels. The reserve rise reflected market perceptions of weakening domestic demand, driving prices down.
U.S. crude oil inventories fell last week amid lower production and imports, while gasoline and distillate fuel stocks edged higher, according to data released Wednesday by the U.S. Energy Information Administration.
Commercial crude oil stockpiles excluding the Strategic Petroleum Reserve fell by 1.6 million barrels to 417.5 million barrels in the week ended Sept. 13 and were about 4% below the five-year average for the time of year, the EIA said.
Weak demand in China, the world’s largest crude oil importer, also continues to put downward pressure on oil prices. Chinese economic data released over the weekend pointed to economic weakness in the world’s second biggest oil consumer, reinforcing doubts over oil demand.
However, renewed tensions in the Middle East that may cause possible output disruptions in the key producing region supported oil prices. The coordinated explosions of pager devices occurred across multiple locations in Lebanon, with Hezbollah members being the primary targets.
Israel has not yet issued a statement on the incident, though tensions along the Israel-Lebanon border have intensified since October 2023, amid ongoing clashes. #Oil Prices Dip on US Crude Stock Build, Fed Rate Cut Liquidity: Banks Drive Yield Surge with T-Bills Selloffs
