Oil prices fell in Asian trading on Wednesday as industry data showed both crude and fuel stockpiles rose in the United States in a sign of weak demand and cautious supply expectations ahead of OPEC+’s policy meeting next month.
Brent crude oil futures were down 30 cents, or 0.36%, at $82.86 a barrel by 03:48 GMT. WTI crude oil futures fell 25 cents, or 0.32%, to $78.13 a barrel.
Both indicators fell marginally in the previous session, amid signs that the supply squeeze is easing and global oil demand is weakening in the EIA forecast report published on Tuesday.
According to information based on American Petroleum Institute (API) figures, US crude oil stocks increased by 509,000 barrels in the week ending May 3. Gasoline and distillate fuel stocks also increased.
After the report was published, prices were on a moderate downward trend due to stock increases in both crude oil and products. Concerns about weaker-than-usual gasoline demand in the U.S. and this inventory buildup have weighed on the sudden crack in RBOB gasoline.
Official US government data on stocks will be published at GMT 14:30. Analysts expect U.S. crude oil inventories to decrease by about 1.1 million barrels last week.
Cautious expectations regarding supply cuts before the June 1 policy meeting of the Organization of Petroleum Exporting Countries and its partners (OPEC+) also put pressure on the markets.
Oil prices have come under further pressure as uncertainty around OPEC+ production policy has increased. Expectations are that members will extend additional voluntary supply cuts beyond the second quarter of this year.
Meanwhile, hopes for a ceasefire in Gaza have put pressure on oil prices in recent sessions, and some analysts say that the risk premium of oil has decreased accordingly.
The decline in oil prices since the mutual attacks by Iran and Israel shows that some of the risk premium in prices has now dissolved.
Prices continue to be supported by OPEC+ production cuts, but it is suspected that members will gradually ease these cuts from July, pushing oil prices lower.
The United States believes that ceasefire negotiations in Gaza can bridge the gaps between Israel and Hamas. US Central Intelligence Agency Director Bill Burns will travel to Israel on Wednesday to meet with Netanyahu and other senior officials, a source familiar with the matter said.
Some analysts think short-term demand is well supported but overall price declines are limited.
