Oil prices dipped on Wednesday, influenced by reports of rising U.S. crude inventories and easing tensions in the Middle East.
Brent crude futures declined by 0.1 percent, settling at $77.11 per barrel by 03:40 GMT, while U.S. West Texas Intermediate crude dropped by 0.2 percent, reaching $73.05 per barrel.
Market sources, citing American Petroleum Institute figures, indicated that U.S. crude oil stocks increased by 347,000 barrels last week. However, gasoline and distillate inventories decreased by 1.043 million barrels and 2.247 million barrels respectively.
The growing U.S. oil inventories, coupled with the country’s status as the world’s largest oil producer and consumer, suggest an oversupply that could put downward pressure on prices.
Further uncertainty in the oil market stemmed from anticipation of Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium later this week.
China’s economic struggles continue to weigh on the market, as weak refining margins and low fuel demand have impacted operations at both state-run and independent refineries.
Data released this week revealed that Russia’s crude oil imports into China fell by 7.4 percent year-on-year in July, while fuel oil imports declined for the third consecutive month.
Read more: Oil prices retreat as geopolitical concerns ease, demand concerns rise
Demand concerns emerge as inventories climb
American Petroleum Institute data showed that U.S. inventories rose by nearly 0.4 million barrels in the week ending August 16, contrary to expectations of a 2.8 million barrel decline. This data, which usually aligns with official inventory figures released later in the day, raised concerns about cooling U.S. demand as the peak summer travel season winds down.
Earlier in August, Energy Information Administration data indicated that U.S. inventories increased for the first time in nine weeks, with smaller draws in gasoline and distillate inventories further supporting the notion of weakening demand.
Recent record highs in U.S. oil production have also contributed to concerns about oversupplied oil markets.
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