Crude oil prices fell on Wednesday after the latest U.S Energy Information Administration (EIA) inventory data release. Oil prices fell more than 3% owing to building of U.S crude reserves, expectations of sluggish demand from top crude oil importer China, which has ben grappling with a surge in COVID-19 cases, and an expected EU embargo on Russian Oil.
The EU embargo also includes punitive measures for third parties buying Russian oil unless they are buying it at a capped price set by the EU and G7. G7 nations are looking at a price cap on Russian seaborne oil in the range of $65-70/bbl, according to a European official on Wednesday.
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Further pressure came from an OECD economic outlook anticipating a deceleration in global economic expansion next year.
According summary of the weekly petroleum data for the week ending November 18, 2022 seen by Investogist;
U.S. crude oil refinery inputs averaged 16.4 million barrels per day during the week ending November 18, 2022 which was 258,000 barrels per day more than the previous week’s average.
U.S. crude oil imports averaged 7.1 million barrels per day last week, increased by 1.5 million barrels per day from the previous week.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.7 million barrels from the previous week. At 431.7 million barrels, U.S. crude oil
inventories are about 5% below the five year average for this time of year.
U.S. gasoline stocks rose by 3.1 million barrels, according to the Energy Information Administration, far exceeding the 383,000 barrel build that analysts had forecast.
“The build in gasoline is kind of a shock,” said Phil Flynn, an analyst at Price Futures group. “The increase in gasoline supplies suggests that maybe we’re seeing demand weakening or that gasoline is going on the rack ahead of the holidays.”
At the time of writing, Brent crude was trading at $84.37 a barrel, down by more than 3.5 percent and West Texas Intermediate was down by close to 4 percent, at $77.40 a barrel as bearish factors weighed prices down.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur