Oil Prices Dip in Asian Trade Amid Rising Inventories and Supply Expectations
Industry Data Shows Rise in Crude and Fuel Inventories
Oil prices in Asian trade experienced a decline as industry data revealed an increase in both crude and fuel inventories in the United States. This surge signals weakening demand in the market, coupled with cautious supply expectations ahead of the upcoming OPEC+ policy meeting.
Brent and WTI Crude Futures Decline
Brent crude oil futures dropped 57 cents to $82.59 a barrel, while U.S. West Texas Intermediate crude futures fell 53 cents to $77.85 a barrel. The marginal decrease follows signs of easing supply constraints and reduced global oil demand as indicated by an EIA forecast report.
U.S. Crude Stocks Rise, Gasoline Demand Weakens
According to market sources citing American Petroleum Institute figures, U.S. crude stocks increased by 509,000 barrels in the week ending May 3. Additionally, gasoline and distillate fuel inventories witnessed a rise, contributing to market concerns over weaker-than-usual gasoline demand.
Cautious Outlook Ahead of OPEC+ Meeting
Anticipation surrounding potential supply cuts from the Organization of the Petroleum Exporting Countries and its allies (OPEC+) ahead of the June 1 policy meeting exerted downward pressure on oil markets. Expectations suggest an extension of voluntary supply cuts beyond the second quarter of the year.
Geopolitical Factors and Ceasefire Hopes Impact Prices
The prospect of a ceasefire in Gaza influenced oil prices, with analysts noting a decline in the risk premium associated with geopolitical tensions. Meanwhile, U.S. efforts to broker a ceasefire between Israel and Hamas could further impact market sentiment.
Analyst Insights and Short-Term Demand Expectations
Despite downward pressure on oil prices, some analysts believe that short-term demand remains resilient, supported by healthy margins. Expectations of increased Asian demand post-peak turnarounds offer a potential counterbalance to overall price declines.
