Brent slips below $95/bbl on unexpected US crude inventory build
Front-month ICE Brent has dropped $2.62/bbl lower on the day, to $94.98/bbl at 09.00 GMT.
PHOTO: American Flag on an Oil Refinery. Getty Images
Upward pressure:
The US Energy Information Administration (EIA) has indicated that there could be a supply crunch early next year as global oil consumption is expected to outpace production. Global oil production is forecast to average 100.6 million b/d in 2023, and inventories to decrease by 1.2 million b/d in the first quarter.
Downward pressure:
The American Petroleum Institute (API) has estimated a 5.6-million-bbl build in US commercial crude inventories in the week of 4 November, indicating a sharp decline in demand. A Reuters poll estimated that commercial stocks had increased by 1.1 million bbls. API reported a 6.53-million-bbl draw in crude oil inventories the week prior.
Official weekly US government figures on crude and oil product stocks are due for release at 15.30 GMT today and could provide Brent with more direction then.
OPEC and US oil production growth, as well as a weakening global economy, could pose downside risks for Brent prices in 2023, according to the EIA.
China has tightened lockdown measures in Guangzhou and other cities after the number of new Covid-19 infections climbed to 7,475 on 7 November. This was up from 5,496 the day before – the most since 1 May. The Chinese government has relentlessly pursued a "zero-Covid" policy of quarantines, lockdowns and compulsory examinations on a daily or near-daily basis.
By Konica Bhatt
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