Oil futures saw a decline on Wednesday as investors eagerly awaited the release of U.S. data on petroleum supplies. Here are the key details:
Price Action
- West Texas Intermediate crude for December delivery fell 44 cents, or 0.6%, to $77.82 a barrel on the New York Mercantile Exchange.
- January Brent crude, the global benchmark, declined 34 cents, or 0.4%, to $82.13 a barrel on ICE Futures Europe.
Market Drivers
The Energy Information Administration (EIA) is set to release two weeks worth of data on U.S. crude and product inventories. Last week’s report was delayed due to a planned systems upgrade.
Analysts believe that this data could potentially stimulate gains in crude-oil prices amidst an overall positive market sentiment. This positivity follows a noteworthy rally in the stock market on Tuesday after a relatively subdued October consumer price index reading.
According to analysts at Sevens Report Research, the recent optimistic tone in equities, driven by expectations of peak policy rates and hopes of a smooth economic landing, has increased the potential for oil market gains. They emphasized that good consumer demand readings for refined products in the EIA data would be crucial in sustaining this trend.
The analysts also emphasized the significance of the headlines and production data in the EIA report. They highlighted the importance of implied consumer gasoline demand metrics in allaying concerns about faltering demand and the potential for energy markets to weaken.
In previous weeks, the American Petroleum Institute reported a surprising 11.9 million barrel increase in crude supplies, causing prices to lower. According to a source familiar with the data, the API reported a 1.3 million barrel rise in inventories last week.
On average, analysts polled by S&P Global Commodity Insights anticipate a climb of 4.5 million barrels in U.S. commercial crude supplies for the two weeks ending Nov. 10. They also predict two-week inventory declines of 1.3 million barrels for gasoline and 2.7 million barrels for distillate supplies.
