Wti Jumps On Declining Us Inventories

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Wti Jumps On Declining Us Inventories

Wti Up By 1.46% On Declining Us Inventories

West Texas Intermediate (WTI) is the leading crude oil benchmark in the USA and is used to track the commodity's price. During the Wednesday session, the WTI scored an impressive gain of +1.46% and bounced from the $77.33 level.

The bigger picture of the oil market suggests that the supply side is at risk of geopolitical risks. Additionally, the expectations of the easing cycle from the US Federal Reserve also support WTI prices.

Crude Inventories Down By 1.5 Million

According to the EIA, a 1.5 million decline was noticed last week in the crude oil inventories. The data also showed a significant drawdown in gasoline inventories while an increase was seen in distillate fuels.

The US Strategic Petroleum Reserve also showed a jump of almost 361 million barrels, which means the total value has now reached 361.8 million. This news was also positive for the WTI, which allowed it to hit the high of $79.32 before setting under the $79.00 handle.

Besides these fundamental changes, the oil prices are also driven by the geopolitical events. The Ukraine conflict has also led to some problems with the Russian refineries, which means a supply-side disruption is highly likely.

Meanwhile, OPEC has also issued the 2024 forecast for oil demand growth. According to them, the total value for the year 2024 will be around 2.25 million barrels, which is a lot higher than the forecasts made by analysts.

In the next few days, the IEA will also upgrade its numbers, which will likely be a little lower than OPEC's numbers.

Amidst all of this, another factor that influences the oil market is the rate cut expectations from the central banks such as the ECB, US Fed, and BoE.

Any rate cuts from the FED will drive up the oil prices in anticipation of higher oil demand. However, it will be bearish for the US Dollar (USD) along with the bond yields.

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