Oil prices witnessed on Wednesday a decline due to increased crude and fuel inventories in the United States, indicating weak demand. Additionally, market participants displayed cautious expectations regarding future oil supply ahead of an upcoming OPEC+ policy meeting in the following month.
During the early morning hours at 03:48 GMT, Brent crude oil futures dropped by 30 cents or 0.36 percent, settling at $82.86 per barrel. Similarly, U.S. West Texas Intermediate (WTI) crude futures decreased by 25 cents or 0.32 percent, reaching $78.13 per barrel.
Both oil benchmarks saw slight declines in the previous session, which were attributed to signs of reduced supply tightness and a decrease in global oil demand, as indicated by a forecast report from the Energy Information Administration (EIA) on Tuesday.
Read more: Oil prices up amidst global tensions, concerns about sluggish demand and reduced supplies
According to market sources citing figures from the American Petroleum Institute, U.S. crude stocks increased by 509,000 barrels during the week ending on May 3. Gasoline and distillate fuel inventories also experienced a rise.
Furthermore, the market was influenced by cautious expectations regarding potential supply cuts by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) in anticipation of their policy meeting scheduled for June 1.
In recent trading sessions, the possibility of a ceasefire in Gaza has also exerted downward pressure on oil prices. Some analysts have noted that the risk premium associated with oil has declined accordingly.
Despite these factors, certain analysts maintain their belief that short-term demand remains relatively strong, thereby limiting the overall decline in oil prices.
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