Oil Prices Stabilize After Data on U.S. Demand Slowdown

SadaNews - Oil prices stabilized on Wednesday after a report revealed an increase in U.S. crude inventories last week, indicating the approach of the end of the seasonal summer demand period.

Brent crude futures rose by 0.14% to $66.21 a barrel, following a 0.8% decline in the previous session. U.S. West Texas Intermediate futures steadied at $63.22 a barrel after dropping by 1.2%.

Market sources cited American Petroleum Institute figures on Tuesday indicating that crude oil inventories in the United States, the world's largest crude consumer, increased by 1.52 million barrels last week.

Gasoline stocks fell while distillate inventories rose slightly.

If the data from the U.S. Energy Information Administration, scheduled for later today, also shows a decline, it could indicate that the peak consumption during the summer driving season has been reached and that refiners are easing their operations.

The demand season typically extends from Memorial Day at the end of May to early September.

Analysts in a Reuters survey expect the Energy Information Administration report to show crude oil inventories declining by about 300,000 barrels last week.

Forecasts released by OPEC and the U.S. Energy Information Administration on Tuesday pointed to increased production this year, which affected prices, but both expect a decline in U.S. production, the largest in the world, next year with the increase in oil and natural gas supplies from other regions.

U.S. Energy Information Administration projections indicate that U.S. crude oil production will reach a record level of 13.41 million barrels per day in 2025 due to increased well productivity, although falling oil prices are expected to lead to a decrease in production in 2026.

OPEC noted in its monthly report that global oil demand will rise by 1.38 million barrels per day in 2026, an increase of 100,000 barrels per day from previous forecasts. The organization maintained its projections for this year unchanged.

The White House downplayed expectations yesterday regarding the chances of a quick ceasefire agreement between Russia and Ukraine, which could push investors to reconsider the possibility of the war ending soon and ease sanctions on Russian supplies that have been supporting prices.

Daniel Hynes, a strategist at ANZ, said, "Trump has lowered the ceiling on expectations regarding his meeting with President Putin.. however, expectations for additional sanctions on Russian crude oil continue to decrease."