Oil prices fell yesterday, after United States (U.S.) crude stocks rose more than expected in the most recent week, even as gasoline inventories hit a four-year low in the world’s largest oil consumer.
Brent crude futures were down $2.53, or 3 per cent, at $82.16 a barrel; U.S. West Texas Intermediate (WTI) crude futures tumbled $2.97, or 3.5per cent, to $80.95 a barrel.
Crude stocks rose more by 3.3 million barrels in the most recent week, more than expected, but gasoline stocks fell to their lowest level since November 2017. U.S. oil market supply has tightened, with stocks at the Cushing, Oklahoma storage hub at their lowest in three years.
Traders also expect the U.S. Federal Reserve will act to curb inflation, which could sap some speculative buying in risk assets including oil.
“Markets already have been under pressure. We’re down because of profit taking from the Fed meeting today,” Phil Flynn, analyst at Price Futures Group in Chicago sad.
President Joe Biden, speaking at a climate summit in Glasgow, blamed a surge in oil and gas prices on the refusal of Organisation of the Petroleum Exporting Countries (OPEC) to pump more crude.
The OPEC and its allies, a group known as OPEC+, is expected to reconfirm plans to keep monthly supply increases steady despite calls for a raise when they meet today.
In a sign high prices are encouraging more supply, BP said on Tuesday it would ramp up investments in onshore U.S. shale oil and gas to $1.5 billion in 2022 from $1 billion this year. Overall, U.S. output increased to 11.5 million barrels per day, equaling the highest level of U.S. production so far this year.
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