Oil unchanged in Wednesday trade

Oil remained largely unchanged after earlier losses, as higher-than-expected US inventories competed with expectations for OPEC+ to extend supply cuts, Bloomberg reported on Wednesday.

Brent crude, the global benchmark, hovered above $83 per barrel, rebounding from a 1.3 per cent decline earlier in the day. This followed a 2.5 per cent increase in the first two sessions of the week due to signs of strength in physical markets.

The American Petroleum Institute reported a more than 8-million-barrel increase in nationwide crude stocks, including at the Cushing, Oklahoma storage hub, which prompted selling.

According to Ole Hansen, head of commodities strategy at Saxo Bank, short-term price variations have been driven mainly by technical trading.

These price movements occurred amid weakness in global equities and a slight increase in the US dollar, making dollar-denominated commodities more expensive for foreign buyers.

Despite this, oil prices are still on track for a modest monthly gain, supported by ongoing supply cuts by OPEC+ and tensions in the Middle East.

Near-term timespreads have widened in a bullish pattern, indicating a tightening market and some physical metrics have also improved. Official US inventory data is expected later on Wednesday.

However, concerns about the demand outlook persist. China’s crude consumption growth is forecasted to slow to just 1 per cent this year as the post-pandemic recovery wanes and demand for new energy vehicles reduces consumption, according to China National Petroleum Corp.