Oil prices experienced a downturn for the second consecutive day, driven by concerns over escalating crude stockpiles in the U.S., the world’s largest oil consumer, and uncertainties surrounding major producers’ output policies.
Brent crude futures for May delivery declined by 0.9% to $85.51 a barrel, while the more actively traded June contract dropped by 0.8% to $84.95. Similarly, U.S. West Texas Intermediate (WTI) crude futures for May delivery fell by 0.8% to $80.98.
This reversal follows a recent surge in prices to their highest levels since October last week. The retreat is attributed to a notable increase in U.S. crude inventories by 9.3 million barrels, as reported by the American Petroleum Institute.
Although distillate inventories rose modestly by 531,000 barrels, gasoline stocks saw a decline of 4.4 million barrels. Official government data is expected to shed further light on these figures.
Market sentiment was further influenced by speculations surrounding the upcoming technical meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+.
Sources indicate that OPEC+ is unlikely to alter its oil output policy until a comprehensive ministerial gathering is scheduled for June. The group plans to convene online on April 3 to review market conditions and members’ compliance with output cuts.
Amidst these developments, concerns arise regarding the ability of OPEC+ to adhere to production quotas.
Instances of overproduction by certain members, including Iraq, have sparked doubts about the group’s efficacy in maintaining output targets. Traders are closely monitoring OPEC’s actions for any indication of a shift in production quotas.
As the market awaits further data releases and OPEC’s decisions, oil prices remain subject to volatility, reflecting the ongoing dynamics between supply and demand, as well as geopolitical factors.
