Oil prices were mainly trading on stable grounds on Wednesday following a higher-than-expected surge in US crude inventories, with supply concerns and a falling US dollar driving prices.
Global benchmark Brent crude futures added 0.6% to $92.29 per barrel, while the US West Texas Intermediate (WTI) crude futures were up 1.0% to $86.20 per barrel.
Oil was made cheaper for those invested in other currencies as a declining greenback provided a bullish signal to markets.
Possible Positives for Oil
Oil prices were pressured earlier in the session as market sources citing data from industry group American Petroleum Institute (API) said US crude stockpiles increased around 4.5 million barrels in the week ended October 21.
The figure was well ahead of expectations of 200,000 barrels, and a draw of 1.3 million barrels stated last week.
The data will put a significant focus on the Energy Information Administration’s (EIA) official US inventory report, set to be released later in the day.
A stock build strengthened concerns over a global recession that would weaken demand further, a slump that has also been seen in softer crude imports of top importer China.
However, continued supply curbs, underscored by International Energy Agency (IEA) head Faith Birol’s warning that the world is in facing “the first truly global energy crisis,” provided support to oil prices.
Furthermore, output cuts from the Organization of Petroleum Exporting Countries (OPEC), due to take effect in November, and the European Union’s latest embargo on Russian oil to be implemented in December should push prices up.
Buyers of WTI are also keeping an eye on additional interventions by US President Joe Biden ahead of the mid-term elections on November 8.
Biden’s administration looks to sell the remaining 15 million barrels of oil from the country’s strategic reserve by the end of this year to put a cap on high gasoline prices.
