Oil prices rebounded slightly on Thursday morning in Asia trading after falling to multi-month lows earlier on the back of a sudden rise in inventories that signaled a fall in U.S. demand.
What Happened: U.S. crude inventories rose by 4.5 million barrels to 426.6 million barrels in the week ended July 29, according to the Energy Information Administration (EIA). Gasoline stocks also recorded a surprise build as demand faltered.
Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. futures increased by 926,000 barrels during the week, Reuters reported.
Expert Take: “You would expect exports to supersize while the Brent/WTI was flying off the handle, but exports are down over a million barrels on the week,” Bob Yawger, director of energy futures at Mizuho, said, as per the report.
Supply Side Developments: The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, called the OPEC+, decided to increase the group’s output target by 100,000 barrels/day from September.
Price Action: West Texas Intermediate (WTI) futures rose 0.58% and were trading close to the $91.19/barrel mark. Brent futures gained 0.42% to trade at $97.19/barrel. Earlier, both benchmarks had fallen to their weakest levels since February.