Oil slips as build in US inventories signals lackluster demand

By Sibel Morrow

ANKARA (AA) - Oil prices decreased on Wednesday over a hefty rise in US crude oil stockpiles, but further losses were limited by the ongoing tension between Western countries and Russia, which is causing supply concerns.

International benchmark Brent crude traded at $80.41 per barrel at 10.09 a.m. local time (0709 GMT) for a 0.33% decrease from the closing price of $80.68 a barrel in the previous trading session.

The American benchmark West Texas Intermediate (WTI) traded at $75.16 per barrel at the same time, a 0.30% loss after the previous session closed at $75.39 a barrel.

In contrast to the market consensus of a 3.9 million-barrel fall, the American Petroleum Institute (API) reported its estimate of a surge of over 7.8 million barrels in US crude oil stocks late Tuesday.

A more-than-expected stockpile increase signals a drop in crude demand, weighing prices down.

The US Energy Information Administration (EIA) will release official oil stock data later Wednesday, and if the estimated build in stock levels is confirmed, prices are expected to fall further.

The Organization of Petroleum Exporting Countries (OPEC) maintained global oil demand growth for 2023, highlighting US oil demand, which is expected to exceed 2019 levels.

According to the monthly oil market report by the Organization of Petroleum Exporting Countries (OPEC) published Tuesday, oil demand will grow by 2.2 million barrels per day (bpd) in 2023 to reach 101.8 million bpd, supported by expected geopolitical improvements and the containment of COVID-19 in China.

The Bank of America predicted that Brent could swiftly surpass $90 per barrel as a result of China's "successful" economic reform and a hawkish stance by the US Federal Reserve.

Meanwhile, uncertainty as to when the Keystone pipeline will resume after the pipeline was shut down in the aftermath of the largest oil spill in a decade continues to increase supply-side concerns. The pipeline operators say the shutdown may take several weeks.