On the Wednesday trading session, oil prices remained steady as the market players were left without any clear direction. The catalyst behind this development in oil prices is the build-up of US crude oil inventories. On top of that, China is also reopening its economy, and then we have global economic uncertainty on our hands.
As a result of these mixed signals, Brent Oil continued to turn positive and negative. When checked last, Brent Crude Oil Futures was up by 43 cents which is equal to 0.5%. On the other hand, WTI also gained 25 cents which are equal to 0.3%. In short, brent crude futures was trading at $80.53 while the WTI futures price was $75.37.
During the Monday as well as Tuesday trading sessions, both contracts made a little gain and rebounded after a major sell-off during the first few days of 2023.
When checked on 6th January 2023, there was an increase of 14.9 million barrels in the crude oil stocks of the USA. And at the same time, there was an increase of 1.1 million barrels in the distillate stocks.
According to analysts, a drop in crude oil stocks was expected, but it seems that the data is telling otherwise.
Another thing which worries the market players is the prospect of higher interest rates and high inflation. If a recession actually happens in 2023, it would be bad news for the oil market globally.
But if the inflation data from the US is satisfactory, it would move the dollar down which will eventually boost the oil demand in the USA & other countries.
For now, the prices have not moved lower despite the rise in the US stockpiles and the talks of a possible recession. The reason for this is the hope that the full reopening of the Chinese economy will fuel demand growth once again. After all, China is the 2nd largest country in terms of oil consumption.