By Malvika Gurung
Investing.com — Oil prices declined on Wednesday, following surprising data released by the for the week ending August 5.
According to the US trade association, US crude inventories ramped up unexpectedly last week, with stockpiles rising by about 2.2 million barrels in the period, compared to the analysts’ forecast of a near 400,000 barrel drop in crude inventories.
Analysts at Reuters had pegged a 100,000-barrels rise in crude inventories.
The data has stirred up demand concerns and investors are now awaiting the on the same, scheduled to release at 10:30 am EDT on Wednesday.
declined 0.63% to $95.7/barrel and shed 0.7% to $89.89/barrel at the time of writing.
If the official data released later today matches the API report, there could be some correction in prices.
Concerns over the suspended oil exports from Russia to Europe via the Druzhba pipeline that transits through Ukraine also weighed on oil prices. Slowing factory activity globally is expected to curtail crude demand in the upcoming months.
“Whatever crude demand destruction that occurs from a weakening global economy won’t be able to drag down oil prices much lower given how low the supply outlook remains,” stated Edward Moya of OANDA.
All eyes are set on the US to be released later today, for indications on global commodity prices and the Fed’s move on further monetary tightening to tame the soaring inflation.