Shortly before 6:30 p.m. CET, Brent lost roughly 3.3 percent and hovered around $93.60 per barrel. U.S. West Texas Intermediate (WTI) crude oil was down about three percent at the same time, settling slightly below $88 a barrel.
–
The drop in prices was triggered by Wednesday’s report by the US government’s Energy Information Administration (EIA) that US oil inventories rose by 4.5 million to 426.6 million barrels last week. At the same time, analysts in a Reuters poll predicted a drop in stocks by 600,000 barrels. U.S. gasoline inventories rose by 200,000 barrels to 225.3 million, while analysts expected a decline of 1.6 million barrels.
–
The Bank of England entered the game
Concerns about the adverse impact of a weak economy on oil demand have been reinforced by the British central bank. It made the most significant increase in its key interest rate since 1995 and predicted that the British economy will enter recession later this year.
–
The OPEC+ group of oil producers, which brings together the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, agreed on Wednesday to raise the production target level by just 100,000 barrels per day in September. However, Reuters sources said Saudi Arabia and the United Arab Emirates were prepared to significantly increase oil production if the world faced a severe supply crisis this winter.
–
The price will rise again
However, analysts still expect that limited OPEC+ production reserve capacity will push oil prices higher in the longer term. “Oil prices should find strong support near the $90 (per barrel) level and eventually return to the $100 level. And this despite the acceleration of the slowdown in the global economy,” said analyst Edward Moya from OANDA.
—
