Oil prices climbed on the international commodities market on Wednesday after a report revealed a significant decrease in U.S. crude stockpiles.
Demand outlook in China remains negative, and a recent World Bank report predicts an oversupply of oil in 2025 and 2026. This oversupply is expected to keep pressure on crude prices, with further pessimism from industry experts.
Brent crude rose by 0.8%, reaching $71.27 per barrel, while West Texas Intermediate (WTI) increased by 0.9% to $67.83 per barrel.
The American Petroleum Institute reported late Tuesday that U.S. commercial crude oil stocks dropped by 573,000 barrels, defying market expectations of a 2.3 million barrel increase.
This decline in crude reserves suggests a growing domestic demand, which is contributing to the rise in prices. The Energy Information Administration (EIA) is set to release official data later today. If it confirms a decrease in crude inventories, prices may climb even higher.
This week, data on U.S. economic growth and private sector employment is expected to provide insights into how quickly the Federal Reserve might lower interest rates. It is widely anticipated that the Fed will reduce the policy rate by 25 basis points next month, with a 74% chance of an additional cut in December. Increased economic activity could lead to higher oil demand in the U.S. Additionally, ongoing military conflicts in Israel and the broader Middle East—home to a significant portion of the world’s oil supply—are also driving prices up.
Currently, crude oil prices are hovering at one-month lows as concerns about supply disruptions in the Middle East ease. The market is now focusing on weaker demand forecasts and predictions of an oversupply in the coming year.
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