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Crude prices are in the green. After a month and a half of decline and a worrying status quo on the markets, prices experienced a significant increase this Wednesday. This situation is due to the publication of the first weekly figures on American crude stocks, reporting a decrease in stocks last week.
At around 09:25 GMT (11:25 CET), the price of a barrel of North Sea Brent crude for delivery in September rose 0.86% to $81.71. Its American equivalent, a barrel of West Texas Intermediate crude for delivery in the same month, rose 0.91% to $77.66.
The day before yesterday, the API, the American federation of industry professionals, reported a decline in commercial crude inventories of about 3.86 million barrels last week, and of 2.77 million barrels for gasoline last week.
“We are seeing a first market turnaround and a rise in prices thanks to new data showing once again a decline in inventory levels in the United States,” explain analysts at Energi Danmark.
The U.S. Energy Information Administration’s (EIA) weekly oil inventory report for the week ending July 19 was highly anticipated on Wednesday.
Analysts are predicting a sharp drop in crude oil stocks but a slight increase in gasoline stocks.
If “the widespread declines reported (Tuesday) evening by the API” are confirmed by the EIA, the downward price trajectory initiated at the end of last week could come to an end, notes Tamas Varga, an analyst at PVM Energy.
The day before, both crude benchmarks had lost nearly 2%, reaching their lowest levels in more than a month and marking the fourth consecutive day of decline, with Brent even approaching the $80 threshold.
Prices had been down with “the resumption of ceasefire negotiations in the Gaza Strip between Israel and Hamas and (the) concerns regarding demand,” explains John Plassard of Mirabaud.
However, what surprised analysts was the market’s immobility after the escalation between Israel and the Yemeni Houthis. Why haven’t geopolitical tensions stirred up black gold?
Following the drone strike on Tel Aviv, claimed by the Houthis, Israel responded with strikes that hit a power plant and fuel depots in the port of Hodeida last Saturday.
In addition, in the Russian region of Krasnodar (southwest), the Tuapse refinery was targeted by several Ukrainian drones, which started a fire. Nearly 90% of the production of this site belonging to the Russian group Rosneft is intended for export.
Despite these developments, “prices have not gone up,” observed Bart Melek of TD Securities, because “the market is more concerned about an oversupply.”
“The opinion that is spreading more and more,” adds the analyst, “is that without a real recovery in China and with a marked slowdown in the American economy, there is a risk that we will have more oil than necessary.”