Oil prices experienced a decline for the second consecutive day, with both Brent and West Texas Intermediate (WTI) futures witnessing a drop of over 1% on Wednesday. This downturn was attributed to the substantial surge in U.S. crude stockpiles and indications that the OPEC+ producer alliance is unlikely to alter its output policy at an upcoming technical meeting next week.
According to reports, Brent crude futures for May delivery fell by 97 cents to $85.28 a barrel, while the June contract declined by 92 cents to $84.71. Similarly, WTI futures for May delivery dipped 41 cents to $81.21 a barrel, and the Brent contract for May delivery shed 49 cents to $85.76 a barrel.
The American Petroleum Institute (API) reported a significant increase in U.S. crude inventories by 9.3 million barrels for the week ending March 22. This data was followed by the Department of Energy's report indicating a rise in crude oil inventories in the Strategic Petroleum Reserve to 363 million barrels, the highest level since last April.
Despite Ukrainian drone attacks on Russian oil refineries, which disrupted an estimated 900,000 barrels per day of refining capacity, oil prices remained under pressure. Brent crude was trading down at $86.07, while WTI was down at $81.53. Gasoline inventories experienced a notable decrease, while distillate inventories rose, and Cushing inventories saw a significant increase.
The market sentiment remains cautious as investors await official figures on U.S. inventories, scheduled to be released by the Department of Energy later in the day. Oil prices are likely to continue facing pressure amidst concerns over rising crude stockpiles and ongoing geopolitical tensions affecting supply chains.
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