Oil prices experienced the third consecutive day of decline on Wednesday, driven by factors including surging crude inventories in the United States, the world’s largest oil consumer, and prospects of a ceasefire agreement in the Middle East.
By 9:47 GMT, Brent crude futures saw a 1.61 percent decline to $84.94 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures saw a 1.75 percent decline to $80.50 per barrel.
U.S. crude inventories surge
The major factor contributing to the decline in oil prices was the surge in U.S. crude oil inventories by 4.906 million barrels last week. Meanwhile, gasoline and distillate stockpiles saw a decline, according to figures from the American Petroleum Institute (API) on Tuesday. Gasoline inventories declined by 1.483 million barrels, while distillates declined by 2.187 million barrels.
Official data from the Energy Information Administration (EIA) is due later on Wednesday.
Moreover, the EIA disclosed a substantial uptick in U.S. crude supply, with production escalating to 13.15 million barrels per day in February from 12.58 million barrels per day in January. This surge, the largest monthly increase in approximately 3.5 years, hints at a growing capacity within the U.S. oil sector and its impact on global oil prices.
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OPEC+ production cuts
As hopes for a ceasefire agreement in the Middle East gained traction, oil prices faced further downward pressure as supply disruptions are set to ease.
Despite the downward trend, forecasts on the output by the Organization of the Petroleum Exporting Countries (OPEC) reveal a 100,000 barrels per day decline in April, bringing OPEC’s production to 26.49 million barrels per day. This decline reflects lower exports from Iran, Iraq, and Nigeria and underscores the ongoing efforts of some members to adhere to voluntary supply cuts agreed upon within the wider OPEC+ alliance.
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