ISLAMABAD
Oil prices remained on a downward trajectory on Wednesday after the report of an inventory buildup in the United States.
As of 1230 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, shed $0.64 (-0.83 percent) to reach $76.80. The West Texas Intermediate (WTI), the main oil benchmark for North America, went down by $0.59 (-0.8 percent) to $73.12.
The price of Russian Sokol increased by $0.32 (+0.48 percent) to $67.33. Similarly, Arab Light prices witnessed an increase of $0.23 (+0.29 percent) to reach $78.21 a barrel.
The price for Opec Basket increased by $2.27 (3.06 percent) to $76.54. The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.
The American Petroleum Institute surprised markets by estimating an inventory build in both crude and gasoline. The API reported a 3.62-million-barrel increase in crude oil inventories, with gasoline stocks up by some 400,000 barrels. Because the market had expected a draw, the estimates pressured oil prices.
If inflation remains stubbornly high, it would mean more rate hikes and more rate hikes would mean pressure on global oil demand as they would push the U.S. dollar higher making oil more expensive for other currency markets.
According to experts, traders are awaiting April’s US consumer price inflation numbers, a key inflation metric, to better understand future US Federal Reserve monetary policy.
They said that the oil market is extremely oversold and it will probably continue to stabilise as long as Wall Street is still confident the Fed will cut rates later this year.
