Oil Prices Inch Up on Hopes of Increased Demand, Supply Cuts; US Stock Build Pressures
Shafaq News/ Oil prices edged higher in early Asian trading on Wednesday, buoyed by optimism over rising demand in developing countries and production cuts by major oil exporters, which offset concerns of an economic slowdown leading to an increase in US crude stocks.
The increase in US crude stocks by approximately three million barrels in the week ending July 7, as reported by the American Petroleum Institute, weighed on prices. Analysts surveyed by Reuters had expected a rise in crude stocks of 500 thousand barrels.
Brent crude futures rose 18 cents to $79.58 a barrel by 0305 GMT, while US West Texas Intermediate crude climbed 18 cents to $75.01.
In the previous session, oil prices gained around 2 percent, supported by a weakening dollar and higher global crude demand expectations.
The International Energy Agency (IEA) anticipates market tightness will persist in the second half of 2023, citing robust demand from China and developing nations and recently announced supply cuts by major exporters such as Saudi Arabia and Russia.
Meanwhile, on Tuesday, the US Energy Information Administration projected that demand would outpace supply by 100 thousand barrels per day in 2023 and by 200 thousand barrels per day in 2024.
Market participants eagerly await US inflation data on Wednesday to gain insights into interest rate expectations, which could impact economic growth prospects and subsequently affect oil demand.
