West Texas Intermediate crude closed $5.01 lower amid fears of lower demand after gasoline inventories rose

The West Texas Intermediate (WTI) contract in New York closed down more than 5% on Wednesday (October 4) after the US revealed that gasoline inventories rose more than expected last week. This indicates a slowdown in demand for oil, and furthermore, the market has been under pressure due to weak US economic data.

• The WTI contract is scheduled for delivery in November. The price of oil fell by $5.01, or 5.6%, to close at $84.22 per barrel. This is the lowest closing level since August 31, 2023.
• As for the Brent crude contract, which was delivered in December. The price of oil fell by $5.11, or 5.6%, to close at $85.81 per barrel. This is the lowest closing level since August 29, 2023.

West Texas Intermediate crude futures closed at a five-week low after the US Energy Information Administration (EIA) said gasoline inventories rose by 6.5 million barrels last week. This is only 200,000 barrels more than analysts expected.

However, US crude inventories fell by 2.2 million barrels, compared to analysts’ expectations of a decline of only 1.4 million barrels. Distillate stocks, including heating oil and diesel, decreased by 1.3 million barrels, compared to analysts’ expectations of a decline of 1.6 million barrels. million barrels

In addition, the oil market was pressured by sluggish economic data from the United States. By Standard & Poor’s Global revealed that the final US Services Purchasing Managers’ Index (PMI) fell to 50.1 in September, below the initial reading of 50.2 from 50.5 in August, with the PMI approaching the 50 level. Below this level will indicate to a contraction in the American services sector.

For a meeting of the Joint Ministerial Monitoring Committee (JMMC) of the Organization of the Petroleum Exporting Countries (OPEC) and allied countries. Or OPEC Plus, the meeting decided yesterday to maintain the OPEC Plus production policy as reached in an agreement in June. As a result, OPEC+ will reduce production by a total of 3.66 million barrels per day until the end of 2024.

The JMMC also voted to support Saudi Arabia in extending the voluntary oil production cut of 1 million barrels per day until the end of this year. Among them is Russia extending the reduction in its oil exports by 300,000 barrels per day until the end of this year as well.

The JMMC Board of Directors is scheduled to hold its next meeting on November 26.

Written by InfoQuest News Agency (05 October 2023)

Tags: WTI, WTI, oil price