Oil prices reached new highs on Wednesday, with Brent crude reaching its highest level since April. This increase in prices can be attributed to tighter supply caused by output cuts from Saudi Arabia and Russia, which outweighed concerns over slow demand from China and a report indicating rising U.S. crude inventories.
The cabinet of Saudi Arabia expressed its support for precautionary measures taken by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, also known as OPEC+, to stabilize the market.
Brent crude rose by 0.7 percent to $86.81 per barrel and touched $86.94, the highest level since April 13. Meanwhile, U.S. West Texas Intermediate (WTI) crude increased by 0.9 percent to $83.70 per barrel, reaching its highest level since November 2022.
Despite concerns over slow demand from China, oil prices have been boosted by OPEC+’s supply cuts and hopes of economic stimulus improving oil demand recovery in China.
However, the American Petroleum Institute (API) reported that U.S. crude stocks rose by 4.1 million barrels last week, which put some bearish pressure on prices. On the other hand, gasoline and distillate inventories fell.
Official U.S. Energy Information Administration inventory figures will be released later in the day.
Chinese data released on Tuesday showed that crude oil imports in July fell by 18.8 percent compared to the previous month, reaching their lowest daily rate since January. However, they were up 17 percent from the same period last year.
To provide support to the market, Saudi Arabia has extended its voluntary production cut of 1 million barrels per day until the end of September, and Russia has announced a reduction of oil exports by 300,000 barrels per day in September.
Overall, oil prices continue to show momentum and remain stable despite concerns over economic headwinds and rising U.S. crude inventories.
