Oil Prices Decline for the Second Consecutive Day Following Expectations of Increased U.S. Inventory

SadaNews - Oil prices declined for the second consecutive day after an industrial report showed the largest increase in U.S. inventories in more than three months.

Brent crude fell close to $64 per barrel, while West Texas Intermediate was traded around $60.

A document issued by the American Petroleum Institute and reviewed by Bloomberg indicated that U.S. crude inventories rose by 6.5 million barrels during the past week, the largest increase since July 25, pending confirmation from official data expected to be released later on Wednesday.

Strong Dollar and Sluggish Stocks Put Pressure on Prices

Oil prices fell on Tuesday after global stock markets stumbled, and the U.S. dollar rose to its highest levels in over five months, adding pressure on oil and dollar-denominated commodities.

West Texas Intermediate has dropped by about 16% since the beginning of the year, amid rising production from OPEC+ and non-allied countries, while the market anticipates an oversupply of oil.

Escalation of Attacks on Russian Infrastructure

Traders are monitoring developments regarding Ukrainian attacks on Russian oil infrastructure after Ukrainian President Volodymyr Zelensky announced an escalation of operations late last month.

Kyiv claimed it targeted the Lukoil refinery in Nizhny Novgorod, which processes about 340,000 barrels of crude per day, most of which is intended for local consumption. It also targeted the Tuapse and Saratov refineries last week.

Russian oil shipments transported by sea fell last month at the fastest pace since January 2024, as U.S. sanctions on Rosneft and Lukoil led major buyers like India and China to refrain from purchasing.

Torbjorn Tornqvist, CEO of Gunvor Group, noted on Tuesday that "over time, increasing amounts of stranded Russian oil will find their way to the market one way or another, as they always do."

He mentioned that Gunvor is currently negotiating to purchase Lukoil's international assets and trading arm.