Onome Amuge
Crude oil prices recovered slightly on Wednesday, edging up from their lowest levels in two months, as data released by an industry group revealed that U.S. crude oil inventories dropped during the previous week.
Brent crude futures edged up by 24 cents, or 0.3 percent, to trade at $73.26 a barrel, while U.S. West Texas Intermediate (WTI) crude oil futures gained 23 cents, or 0.3 percent, to $69.16 a barrel.
Supporting the upward momentum in oil prices, industry sources reported that U.S. crude inventories dropped by 640,000 barrels for the week ending February 21, according to data released by the American Petroleum Institute (API) on Tuesday.
Adding credence to the bullish sentiment in crude markets, analysts at ING underscored the potential impact of the API data on crude prices, stating that if confirmed by the EIA later today, it would mark the first decline in U.S. crude oil inventories since mid-January.
Adding to the bullish sentiment, analysts observed the improving prospects for a peace deal between Russia and Ukraine, citing potential ripple effects on crude oil markets.
In addition, the market closely monitored the potential impact of a minerals deal between the U.S and Ukraine, which could bring the world a step closer to easing sanctions on Russian oil and gas exports.
The volatility in oil prices has been further exacerbated by worries over the potential impact of U.S. President Donald Trump’s protectionist policies, specifically his decisions about tariffs on China and other trading partners, on the country’s economy and global trade.
The impact of the U.S. sanctions on Iran, which could lead to a significant decline in the country’s crude exports, has been somewhat cushioned by a combination of factors, including OPEC+’s plans to ramp up production in the coming months.
In a note to clients, ANZ Bank analysts stated that U.S. policy measures could drive an up to one million barrel-per-day reduction in Iranian crude exports.
