- US crude inventories decreased by 3.7 million barrels last week.
- The number of US employment openings in February fell to the lowest in almost two years.
- The Middle East received record amounts of Russian diesel in March.
Despite larger-than-expected draws in US crude and fuel stocks, oil prices remained mostly unchanged on Wednesday. The market weighed deteriorating economic outlooks against forecasts of US crude inventory declines and plans by OPEC+ producers to reduce production.
According to government statistics, US crude inventories decreased by 3.7 million barrels last week, which was about 1.5 million barrels more than expected. Distillate and gasoline stocks decreased by 3.6 million and 4.1 million barrels, respectively, more than was anticipated.
The Organization of the Petroleum Exporting Countries added voluntary output cuts on Monday, increasing oil prices by more than 6%.
Many people were surprised by the OPEC+ decision to voluntarily reduce the petroleum supply beginning in May. The global crude balance is already anticipated to tighten over the summer. This will undoubtedly support crude prices.
Data indicating a slowdown in the US economy overshadowed rising demand for crude and fuel.
The number of US employment openings in February fell to the lowest in almost two years, indicating a slowdown in the labor market.
There was a substantial drop in job openings before the recent banking turmoil, which led to tighter credit conditions. There are concerns about an overall decline of jobs in the economy.
The drop in open positions indicated that the Fed’s aggressive rate increases to control high inflation was beginning to have an impact. However, some economists were concerned about a sharp weakening in the job market in light of banks tightening lending standards. Numerous people have lost their jobs recently, primarily in the property and technology industries.
Since weak economic data from the US and China raise demand concerns, traders will watch this week’s non-farm payroll data for clues on wider economic trends.
According to shiptracking statistics, the Middle East received record amounts of Russian diesel in March.
With the addition of Russian oil to the rising output from Saudi and Kuwaiti refineries, the Middle East is rapidly emerging as a significant supplier of industrial fuel to Europe and Africa while also increasing stocks in Asia. Rising supplies may hamper any effort to drive crude oil prices significantly higher.
