WTI crude oil (Symbol: USOUSD) hovered near $73 per barrel on Wednesday, maintaining their position at four-month lows after five consecutive sessions of decline.
Brent crude oil (Symbol: UKOUSD) also held around $76 per barrel, near three-month lows. Both benchmarks are weighed down by signs of rising global supplies and an uncertain demand outlook.
The images above show the decline in oil prices, as observed on the VT Markets app.
Industry data revealed a significant increase in US crude inventories, which jumped by 4.052 million barrels last week. This was a stark reversal from the decline of 6.49 million barrels last week, and defied market expectations for a total supply of 1.9 million barrels draw.
Additionally, US gasoline stocks rose by more than 4 million barrels, surpassing market expectations. These stockpiles suggest that supply is outpacing demand, contributing to the downward pressure on oil prices.
On Sunday, OPEC+ announced an extension of most of their supply cuts into 2025 but indicated that voluntary cuts from eight member countries could gradually take place starting October.
On Sunday, OPEC+ announced an extension of most of their supply cuts into 2025, indicating a continued effort to manage the global oil supply and support prices.
However, OPEC+ also opened the door for the gradual unwinding of voluntary cuts from eight member countries starting in October. These countries include Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman.
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This will bring in additional supplies of over 500,000 barrels per day by December, and 1.8 million barrels per day into the market by June 2025. This move reflects a cautious approach by OPEC+ to balance market stability with the need to meet rising global demand without causing a supply glut.
Crude oil prices may continue to face downward pressure if US inventory levels remain high and global demand remains uncertain. Monitoring OPEC+ actions and inventory reports will be crucial for short-term price movements.
Further, the gradual re-entry of 1.8 million barrels per day into the market by June 2025 could limit any significant price recovery unless global demand shows substantial improvement.
As always, inventory levels and production decisions by the OPEC+ remain key drivers of oil price movements in oil trading. As these factors unfold, traders can seek out market direction and trading opportunities in the oil sector.
