© Stocksak. FILE PHOTO: The Midland, Texas, U.S.A, pump jacks operate at sunset on February 11, 2019. Picture taken February 11, 2019, REUTERS/Nick Oxford/File Photograph
By Sonali Paul
MELBOURNE, (Stocksak), Wednesday’s oil prices fell as the dollar strengthened and as industry data that showed that oil stocks rose more than expected raised concerns about a global recession. Futures for December fell $1.17, or 1.3% at $92.35 a bar at 0111 GMT. This follows a 26 cent increase in the previous session.
U.S. West Texas Intermediate crude futures for December delivery were down by 88 cents or 1% to $84.44 per barrel, reverseing the gains of the previous session.
“The prospect of a global slowdown and tighter monetary policies has been outweighing supply reductions in the recent weeks,” ANZ Research analysts wrote in a note.
According to market sources, crude oil inventories in the United States rose by approximately 4.5 million barrels during the week ending Oct. 21. These figures were cited by the American Petroleum Institute, an industry group.
Stocksak polled five analysts and found that they expected an average build of around 200,000 barrels.
API data also showed that distillate stocks, which includes diesel and jet fuel, increased by approximately 600,000 barrels, compared to analysts’ estimates of a drawdown at 1.1 million barrels.
However, gasoline inventories dropped by nearly 2.3 million barrels, almost twice the decline analysts expected.
Official U.S. stockpile information from the Energy Information Administration is due Wednesday at 1430 GMT.
The market also suffered from a stronger dollar. The, which measures six major peers against the greenback, increased to 111.02.
A stronger dollar decreases oil demand as it makes crude oil more costly for those who have other currencies.
The Organization of the Petroleum Exporting Countries and its allies led by Russia made the decision to reduce oil output. However, the White House welcomed Tuesday’s moves by Saudi Arabia to support Ukraine in its war against Russia.
Joe Biden, the American President, is worried that gasoline prices could rise ahead of Nov. 8, congressional elections. He warned the Saudis that they would be punished if they align with Russia and agree to reduce crude oil supply.