Oil prices fell at the end of trading on Wednesday, supported by hopes of a truce between Russia and Ukraine, and a rise in US inventories.
This fifth drop in oil prices, in 6 sessions, comes in reaction to traders’ hopes for progress in Russia-Ukraine peace talks, and a surge in US crude stocks.
The oil market has seen wild swings for about two weeks, with both benchmarks trading over the past 30 days in a range that is wider than at any time since mid-2020.
oil prices today wednesday
The situation was no different in trading on Wednesday as global benchmark Brent crude traded in the $6 range between $97.55 and $103.70 before hitting $98.02, down $1.89 or 1.9%, according to Reuters.
US benchmark West Texas Intermediate ended the session up $1.40, or 1.5%, at $95.04 a barrel.
Timeline Oil prices a week from now
A frenzied buying spree last week pushed Brent briefly above $139 a barrel amid fears of a disruption to Russian supplies.
Brent is now more than $40 below that level, and analysts warn this reflects strong optimism that the war will be over soon.
The United States and other countries have imposed strict sanctions on Russia since it began its military operation in Ukraine more than two weeks ago.
This obstructed Russia’s oil trade, which amounts to more than 4 to 5 million barrels of crude per day.
Brent posted gains of 28%, in 6 days, and then fell 24%, during the previous six sessions, including Wednesday’s session.
Prices hit their highest level in 14 years on March 7, before falling again.
US reserves rise
And data from the US Energy Information Administration showed on Wednesday that US crude stocks rose 4.3 million barrels last week, while a decline was expected.
Data from the Energy Information Administration showed crude stocks at the Oklahoma delivery hub rose by 1.8 million barrels last week, the first increase since late December.
Gasoline stocks fell 3.6 million barrels over the past week to 241 million barrels, while they were expected to fall 1.6 million barrels.
Distillate stocks, which include diesel and heating oil, rose by 332,000 barrels to 114.2 million barrels, versus expectations for a 1.8 million barrel decline.
The data showed that US net crude oil imports last week fell by 438,000 barrels per day to 3.46 million barrels per day.
On the other hand, oil stocks in the US Strategic Petroleum Reserve fell to about 575.5 million barrels, the lowest level since June 2002.
On Wednesday, the US Federal Reserve raised interest rates for the first time in 3 years, but this had little impact on the course of the oil market.
Russian oil losses
The International Energy Agency revealed large oil losses that Russia will suffer during the coming period, including the halting of Russian oil exports and the decline in demand.
And the International Energy Agency said Wednesday that 3 million barrels a day of Russian oil and its products may not reach markets by early April, in the wake of Russia’s war in Ukraine.
In its monthly report, the agency expects “a reduction in total exports of up to 2.5 million barrels per day, of which crude oil represents 1.5 million barrels per day and products represent one million barrels per day. “.
He also expected a decline in Russian domestic demand for oil products.
“These losses will increase if the embargo and public discontent increase,” the Paris-based agency said.
OPEC maintains its optimistic forecast
The Organization of the Petroleum Exporting Countries (OPEC) said Tuesday night that oil demand in 2022 faces challenges from the Russian war in Ukraine and high inflation amid rising crude prices, but fell short of change its forecast of strong demand this year.
In a monthly report, OPEC maintained its view that world oil demand will increase by 4.15 million barrels per day this year and is supposed to reach 100.90 million barrels per day.
The organization said in its annual report that “these forecasts are subject to adjustment in the coming weeks” when there will be “greater clarity” about the geopolitical implications associated with the war in Ukraine.
But the organization said the war in Ukraine and ongoing concerns over COVID-19 are reshaping the global economy, adding that this will have a short-term negative impact on global growth.