2023-08-02 20:19:00
© Archyde.com. An oil rig in Texas with a photo from Archyde.com archive.
From Laura Sannicola
(Archyde.com) – Oil prices settled down 2 percent on Wednesday despite a historic drop in crude inventories in the United States as traders reluctance to take risks after a major ratings agency downgraded the US government’s credit rating.
The Energy Information Administration said on Wednesday that US stockpiles from last week fell by 17 million barrels, their largest weekly decline ever.
Despite the record decline, US oil prices fell amid declines in the financial markets after the rating agency Fitch downgraded the US government’s top credit rating.
US crude futures fell $1.88, or 2.3 percent, to settle at 79.49 a barrel, while Brent crude futures fell $1.71, or two percent, to $83.20 a barrel.
The two benchmarks rose by more than a dollar earlier in the session, supported by the decline in inventories, which was shown by data published on Tuesday.
Oil stocks also began to decline in other regions as demand exceeded available supply, which was triggered by deep production cuts by Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries (OPEC).
Concerns are also growing that oil purchases will slow down in China, the world’s largest oil importer, due to higher prices.
Analysts expect it to extend its voluntary cut in oil production by one million barrels per day for another month, including September, at a meeting scheduled for Friday.
Six sources in the OPEC + group told Archyde.com that it is unlikely that the group will change the current oil production policy during the meeting of the ministerial committee on Friday.
(Reporting by Trixie Yap in Singapore and Ahmed Ghaddar in London; Reporting by Muhammad Ali Farag for the Arabic Bulletin; Editing by Marwa Gharib)
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