Oil prices fell in Asian trade on Wednesday, cutting short a recent rebound as industry data showed an unexpected increase in U.S. inventories. However, prices were sitting on strong gains over the past week as persistent supply disruptions and lower rates attracted traders to crude at heavily discounted levels. An escalation in Middle East tensions also contributed to some demand for crude.
Crude oil fell 0.4% to $73.41 a barrel, while Brent crude fell 0.4% to $69.69 a barrel by 21:17 ET (01:17 GMT). Both contracts rose sharply from near three-year lows over the past week.
US Inventories Unexpectedly Increase- API Data
Data from the American Petroleum Institute (API) showed U.S. oil inventories saw an unexpected build in the week to September 13. Inventories grew by 1.96 million barrels, compared to expectations for a draw. This unexpected build indicates limited disruptions to production from Hurricane Francine.
Demand Concerns and Rate Cuts in Focus
Chinese markets reopened with concerns over slowing growth in the world’s biggest oil importer. Markets are also awaiting the conclusion of a two-day Federal Reserve meeting where an interest rate cut is expected. Anticipation of this decision pulled down the dollar and helped spur gains in crude.
Analysis:
This article highlights the fluctuations in oil prices due to unexpected increases in U.S. inventories and concerns over slowing growth in China. The market is also focused on the upcoming Federal Reserve meeting and the potential impact of an interest rate cut. Traders are closely monitoring these developments as they can have significant implications on oil prices and global economic stability. It is important for investors to stay informed about these factors to make well-informed decisions about their finances and investments.
