Oil Prices Decline in Asia

Oil prices dropped in Asian trade on Wednesday following data indicating a rise in U.S. oil inventories. Attention remains on U.S. diplomatic efforts to ease Middle East tensions.

After Israel announced the death of Hashem Safieddine, its crude prices previously rose. U.S. Secretary of State Antony Blinken met with Israeli officials regarding conflict de-escalation and the need for more humanitarian assistance in Gaza.

There are ongoing concerns about the economic indicators from China, the world’s top oil importer, amidst fears of weakened demand.

Current Oil Prices

Brent oil futures for December fell 0.4% to $75.75 a barrel, while West Texas Intermediate crude dropped 0.4% to $71.45 a barrel by 21:00 ET (01:00 GMT).

U.S. Inventories Show Significant Increase

The American Petroleum Institute reported a rise of 1.643 million barrels in U.S. oil inventories, surpassing the expected increase of 0.7 million barrels. This trend typically reflects in upcoming official inventory data and raises worries about falling fuel demand in the U.S.

Recent dollar strength, fueled by expectations of limited interest rate cuts by the Federal Reserve, also pressured oil prices, making the dollar the strongest it has been since early August.

Future Price Predictions

Goldman Sachs analysts predict oil prices will average around $76 per barrel in 2025, despite a moderate crude surplus and spare capacity in major oil-producing nations. They noted that tensions in the Middle East have not significantly affected oil supplies, and OPEC producers have sufficient capacity. The cartel has recently revised its oil demand forecast down for 2024 and 2025 but is poised to increase production later this year.