Oil Prices Stay Stable Despite Weak Movements
Oil prices held steady on Wednesday despite a weaker US dollar as investors awaited additional inventory data to assess demand patterns. Following a 4.1% advance in the previous session, the West Texas Intermediate (WTI) crude futures for the United States increased by 15 cents to $77.29.
Oil Maintains Support Following Powell’s Remarks
After Federal Reserve Chair Jerome Powell announced less aggressive interest rates than the market had anticipated, oil benchmarks are expected to sustain support. In contrast to prior projections of an increase, the most recent inventory data also showed a reduction in stockpiles.
Weaker Dollar’s Effect on Oil Prices
Oil prices have somewhat decreased as a result of the lower U.S. dollar, but Yeap Jun Rong, IG’s market analyst, is skeptical that this trend will continue. Oil prices may still face difficulties if the currency has a prolonged comeback.
The oil market is still stable.
According to Westpac Senior Economist Justin Smirk, the oil market is now in equilibrium, with prices likely to rise if the developing world experiences stronger-than-expected growth.
Data from API’s Weekly Inventory Supports Market
Contrary to experts’ projections of a 2.5 million barrel gain, the American Petroleum Institute’s (API) weekly inventory report revealed a reduction of around 2.2 million barrels in oil stockpiles in the week ending February 3rd. But gasoline and distillate stockpiles increased more than anticipated, with gasoline stocks rising by around 5.3 million barrels and distillate stocks, which include diesel, by nearly 1.1 million barrels. The U.S. Energy Information Administration’s report, which is scheduled to be released at 1530 GMT, will be awaited by the market for confirmation of this reduction in oil stockpiles.