Crude Prices Dip Amid Rising Inventories and Demand Concerns

Prices

• Brent crude futures fell 21 cents, or 0.27%, to $76.27 a barrel by 0020 GMT. U.S. West Texas Intermediate crude slipped 25 cents, or 0.34%, to $72.95 per barrel. MCX Crude oil prices opened at 6169 with a fall of 0.27%.

Demand and Supply

• U.S. crude oil, gasoline and distillate inventories rose last week, according to market sources citing American Petroleum Institute figures on Tuesday.
• Benchmarks slipped accordingly. Both WTI and Brent had bounced off multi-month lows to settle higher in the previous session.
• The API figures showed crude stocks were up by 176,000 barrels in the week ended Aug. 2, the sources said, speaking on condition of anonymity. Analysts polled by Reuters had expected crude stocks to fall by 700,000 barrels.
• Gasoline inventories rose by 3.313 million barrels against analysts’ expectations for a 1 million bbl draw, while distillate stocks rose by 1.217 million barrels, a bigger build than anticipated.
• The U.S. Energy Information Administration is due to release weekly inventory data at 10:30 a.m. (1430 GMT) on Wednesday.

News

• The Abu Dhabi National Oil Company (ADNOC) has set the September official selling price (OSP) of its benchmark Murban crude at $83.80 a barrel, it said on Tuesday, up from the August OSP of $82.52.
• Oil prices perked up somewhat on Tuesday ahead of the API data release. At 03:35 pm ET, Brent crude was trading up $0.12 (+0.16%) on the day at $76.42-down more than $2 per barrel from this time last week. The U.S. benchmark WTI was also trading up on the day by $0.21 (+0.29%) at $73.15-down roughly $2 per barrel from this time last week.
• Gasoline inventories also rose this week, by 3.31 million barrels, more than offsetting last week's 1.917-million-barrel decrease. As of last week, gasoline inventories are 3% below the five-year average for this time of year, according to the latest EIA data. 
• Distillate inventories saw an increase this week of 1.22 million barrels, compared to last week's 322,000-barrel decrease. Distillates were about 7% below the five-year average for the week ending July 26, the latest EIA data shows. 

Expert's Opinion

• The oil market has been showing a tendency towards weakness since mid-July. Last week, the price of Brent recorded its fourth consecutive weekly loss, which was last seen in autumn 2023. Demand concerns as a result of weaker economic data from the three most important demand regions - the US, China and Europe - have become more pronounced since Friday.