Oil Futures Steady

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Oil Futures Steady

Oil Futures Steady On Us Inventory Drawdown

Oil prices remained steady on Wednesday, as reports show a drawdown in the US crude oil inventories. This news has helped resolve some fears regarding the dwindling global oil demand.

Last week, the major crude oil contracts tumbled lower as the report from China sparked fears of slow demand. However, this will now be countered by the sizeable drawdown in the USA, which is also a major oil consumer.

Brent oil futures (September) are trading around $83.80/barrel with a +0.1% change. Similarly, the WTI futures are trading around $79.80/barrel with a +0.1% change.

4.4 Million Inventory Drawdown - Api

The data from the API shows that the week ending on 12th July led to a much higher drawdown than the forecasts. Overall, around 4.4 million barrels were used from the inventories against the expectations of 33,000.

Later today, the official inventory data will be released, which is expected to be similar to the API data. This also marks the 3rd week in a row of consistent drawdowns in the US oil inventories. According to experts, the reason for this drawdown is an increase in the travel demand due to the summer season.

Meanwhile, media reports suggest that the OPEC members have once again talked about intentions to limit oil production through supply cuts. This will allow them to keep a tighter oil market with higher prices.

Despite the positive news from the USA, the concerns regarding the slowdown in Chinese demands are still a reality. So, we can expect the oil prices to remain under pressure this week as well.

The data released last week showed a sharp decline in the crude imports to China. This aligns with the perception that China is going through a phase of weak growth, which means less oil demand.

Right now, the only thing that can lead to higher oil prices is more supply cuts or a sudden rise in geopolitical tension.

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