On Wednesday, the oil prices fell to a near four-week low. This price rise was due to the U.S. crude stocks rising more than anticipated.
The US crude stocks increase as gasoline inventories in the world’s largest oil consumer hit a four-year low.
As a result, the Brent crude futures had a $2.73 decline, or 3.2%, to the price of $81.99 per barrel. This is while the U.S. West Texas Intermediate, or WTI, crude had a $3.05, or 3.6%, decline in value to the price level of $80.86. This fall has been the biggest daily percentage decline for both benchmarks since early August. Also, the lowest closes for Brent oil since October 7th and WTI oil since October 13th.
The weekly crude stocks had a more than expected rise of almost 3.3 million barrels. Meanwhile, the gasoline stocks went a different direction and fell to their lowest level since November 2017.
The U.S. oil market supply is on a decline. This is while the Cushing’s stocks at the Oklahoma storage hub are at a new 3-year low.
Future Plans of The U.S. Federal Reserve
The U.S. Federal Reserve has commented on the matter and has said that it is planning on tapering the asset purchases this month. This policy change has concerned the traders. In response, the trades have said that the tapering can rise the speculative buying in risk assets such as oil.
Phil Flynn, the market analyst at Price Futures Group in Chicago has said that the “Markets are already under great pressure, and the market pressure will lead to changes in profit.
Joe Biden, the president of the United States, made a statement regarding the oil prices in his speech during the COP26 global climate summit in Glasgow. He said that the surge in the prices of commodities such as oil and gas is caused as a result of the OPEC nations’ refusal on increasing the supply.
According to a report from AAA, the retail price of one barrel of oil in the US was lately around $3.40. This price is 20 cents higher than the previous months.
The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+ are holding a meet on Thursday. In this meeting, the OPEC+ is expected to reconfirm its plans regarding oil supply. It is expected that OPEC+ announced its program for keeping the monthly supply increases of oil at a steady pace, despite the pressures for an acceleration.