Oil futures experienced a downturn following a significant increase in U.S. crude inventories, countering the previous session’s gains fueled by anticipated supply reductions.
Talks of a ceasefire in Gaza further restrained the advance in prices.
In the International Commodity Exchange (ICE), Brent crude for May dropped 0.62% to $82.15 per barrel.
April’s West Texas Intermediate (WTI) also saw a 0.42% decrease to $78.54 a barrel on the New York Mercantile Exchange.
An unexpected 4.2 million barrel rise in U.S. crude oil stockpiles last week sparked oversupply concerns, surpassing analyst forecasts.
This surge effectively neutralized decreases in gasoline and distillate inventories.
The increase in reserves interrupted the price boost seen in the prior session, spurred by OPEC+ deliberations on prolonging production cuts into the next quarter.
Analysts from TD Securities hint that traders may soon offload recently acquired long-dated contracts at sub-$78 prices.
Even with a Ramadan ceasefire easing supply fears, analysts doubt it will reduce price risk premiums without lasting conflict resolution. Ongoing Red Sea operations compound these concerns.
Israel hints at ground assault on Hamas‘s Rafah stronghold, risking safety of over a million Palestinians for hostage release deal before Ramadan.
Novak’s statement to Reuters highlights how geopolitical and market dynamics intricately influence global oil prices.