Oil prices experienced a downward trend for a second consecutive day on Wednesday following reports of a significant surge in crude stockpiles in the United States, coupled with indications that major producers are unlikely to alter their output policy at an upcoming technical meeting.
According to market data, Brent crude futures for May delivery dropped by 74 cents, equivalent to 0.9%, reaching $85.51 a barrel at 0420 GMT. The May contract is slated to expire on Thursday, while the more actively traded June contract also saw a decline of 68 cents, or 0.8%, settling at $84.95.
Similarly, U.S. West Texas Intermediate (WTI) crude futures for May delivery fell by 64 cents, or 0.8%, reaching $80.98 per barrel.
The retreat in oil prices this week follows a previous surge that led to their highest levels since October last week. Despite the recent decline, prices remain approximately 3% above the average closing price in the first week of March.
Market strategist Jun Rong Yeap from IG in Singapore attributed the downward pressure on oil prices to several factors, including a notable increase in U.S. crude inventories and expectations for OPEC+ to maintain its current output policy at the upcoming meeting next week. Yeap highlighted profit-taking activities in response to a strong rally witnessed in mid-March.
Reports indicate that U.S. crude oil inventories rose by 9.3 million barrels in the week ending March 22, as per data from the American Petroleum Institute, according to market sources. The combination of increased U.S. crude stockpiles and uncertainty surrounding future output policies among major oil-producing nations has contributed to the recent downward trajectory in oil prices. Analysts will closely monitor developments in global oil markets to assess the potential impact on future price movements.
