Oil prices fall on larger-than-expected U.S. crude inventories

February 15, 2023 (MLN): Oil prices declined in early Asian trade on Wednesday following a drop of over $1 per barrel in the previous session due to industry data revealing a larger-than-expected increase in U.S. crude inventories, as Reuters reported. 

Brent crude futures decreased by 20 cents to $85.38 per barrel while U.S. West Texas Intermediate (WTI) crude futures fell by 19 cents to $78.87.

According to sources, American Petroleum Institute figures indicated a rise of approximately 10.5 million barrels in U.S. crude inventories for the week ended February 10th, which was much higher than the 1.2 million-barrel increase predicted by nine Reuters-polled analysts.

The larger-than-expected build-up in inventories could point to a potential decline in fuel demand. Gasoline stocks increased by roughly 846,000 barrels and distillate stocks rose by about 1.7 million barrels. The official government inventory estimates are due at 10:30 a.m. EST (0330 GMT) on Wednesday.

The sale of 26 million barrels of oil from the U.S. strategic reserve by the Department of Energy also weighed on crude prices as the reserve is already at its lowest level in nearly four decades.

Conversely, the Organization of the Petroleum Exporting Countries (OPEC) raised its 2023 global oil demand growth forecast by 100,000 bpd, to 2.32 million barrels per day or 2.3%, due to China's reopening, and trimmed supply forecasts for major non-OPEC producers, indicating a tighter market.

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