- On Wednesday, Oil fell to its lowest level of the year.
- US crude output increased last week, reaching 12.2 million barrels per day, its highest level since August.
- US gasoline stocks increased by 5.3 million barrels over the week to reach 219.1 million.
After falling to their lowest point this year in the previous session, oil prices rose in Asian trade on Thursday. However, worries that economic slowdowns will affect fuel consumption will continue to limit advances.
On Wednesday, Oil lost all of its gains since Russia invaded Ukraine and aggravated the greatest global energy supply crisis in decades, falling to its lowest level of the year.
In March, due to what Moscow referred to as a “special operation” in Ukraine, which has continued ever since, the Oil price soared to about $140 per barrel, close to an all-time high.
The market has been progressively falling in the last few months as experts prepare for weakening global growth, partly caused by rising energy prices. Larger-than-anticipated growth in US gasoline stocks was the primary cause of Wednesday’s losses.
According to Jun Rong Yeap, market strategist at IG, today’s move could mostly be an attempt for prices to stabilize after the recent severe sell-off. However, a generally cautious environment is still in place.
He continued, saying that concerns about demand would continue to be a major drag on Oil prices, while supply-demand imbalances and expectations for China’s reopening were only temporary drivers.
The Energy Information Administration said on Wednesday that US crude output surged to 12.2 million barrels per day last week, its highest level since August.
Even though US Oil stockpiles decreased last week, the rise in gasoline and distillate inventories raised concerns about waning demand.
The EIA reported that Distillate inventories, including heater oil and diesel, increased by 6.2 million barrels, while gasoline stocks rose by 5.3 million barrels over the week to reach 219.1 million.
Western officials are currently in discussions with their Turkish counterparts to find a solution to the oil tanker lag off the coast of Turkey. This comes after the G7 and EU implemented further limitations on Russian oil shipments on December 5.
Loosening Restrictions on COVID-19 in China, one of the world’s largest crude oil users, helped stabilize oil prices. However, this might just be a short pause before the decline continues.
