Oil prices up on expected fall in US crude stocks

ANKARA

Oil prices increased on Wednesday due to an uptick in demand after statistics revealed that US crude stockpiles decreased more than anticipated.

International benchmark Brent crude traded at $95.43 per barrel at 10.07 a.m. local time (0707 GMT) for a 0.82% increase from the closing price of $94.65 a barrel in the previous trading session.

American benchmark West Texas Intermediate (WTI) traded at $89.28 per barrel at the same time for a 1.02 % gain after the previous session closed at $88.37 a barrel.

Expectations of a hefty drop in US crude oil inventories were the driver for the upward price trend.

Late Tuesday, the American Petroleum Institute (API) announced its estimate of a fall of 6.53 million barrels in US crude oil inventories relative to the market expectation of a rise of 267,000 barrels.

A strong inventory decrease implies an uptick in crude demand in the US, assuaging market concerns over falling demand.

Positive forecasts on recovering demand also fueled market optimism.

In its World Oil Outlook 2045 report released on Monday, the Organization of the Petroleum Exporting Countries (OPEC) forecasted that global oil demand would increase by over 10% by 2027 and more than 13% by 2045 compared to 2021.

The International Energy Agency (IEA), however, forecasted that oil demand would peak in the mid‐2030s at 103 million barrels per day (bpd). The agency predicted in its October oil market report that world oil demand is to average 101.3 million bpd in 2023.

Prices gained during previous trade over a weaker US dollar ahead of a Fed meeting on Wednesday when the US is expected to raise the interest rates by 75 basis points.

On Wednesday, the dollar index is continuing to decline, encouraging investors in holders of other currencies to benefit from lower oil prices.

As China, the second-largest consumer of oil, continues to enforce its rigorous zero-covid policy, demand problems there have been putting pressure on prices.