Oil prices dropped on Wednesday after a surprising increase in US crude inventories last week, as demand was curtailed by refineries in the southern states forced to be shut down due to the cold.
Traffic on the Houston ship channel is slowly returning to normal, but terminals are still experiencing problems due to the freezing weather in Texas last week.
Crude oil stocks increased by 1 million barrels in the week of February 19, despite the forecast of 5.2 million barrels of draw. API data showed that refinery crude oil sales fell 2.2 million barrels.
West Texas Intermediate (WTI) crude futures were down 56 cents or 0.9% at $61.11 a barrel at 0506 GMT, after slipping 3 cents on Tuesday.
Brent crude futures fell 35 cents, or 0.5%, to $65.02 a barrel, erasing Tuesday’s 13 cents gain.
Since the beginning of the year, there is a pause in the Brent and WTI with the price decline after a 26% to 13 month rise. This rally surely surpassed itself and saw much higher levels than pre-Covid levels.
With Brent rumored to rise again to the range of $ 66.45-66.97 a barrel, predicting how quickly the US oil supply will recover is the key. It appears that supply will recover faster than refineries and supply will exceed demand in the next few weeks. This will again have a negative impact on the market.
The supply discipline of the Organization of Petroleum Exporting Countries and its allies, the extra 1 million barrels cut of Saudi Arabia and the mandatory supply cut in the USA led to the rise in prices.
