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Oil closed slightly lower after hitting seven-week highs

Oil closed slightly lower after hitting seven-week highs
Oil closed slightly lower after hitting seven-week highs

The oil prices traded slightly lower on Wednesday, near their highest levels in seven weeks, as the market considers concerns about escalating conflicts in Europe and middle East and optimism about summer demand, on top of an industry report that said U.S. crude inventories USA increased unexpectedly.

In this way, crude oil futures Brent for August, which expire on Thursday, lost 6 cents, or 0.1%, to $85.33 a barrel, while U.S. crude West Texas Intermediate (WTI) fell 8 cents, or 0.1%, to $81.57 a barrel.

Previously, the Brent reached $85.84 a barrel, its highest level since May 1, while the WTI rose to $81.96 a barrel, a high since April 30, in a session where trading activity was thin due to a federal holiday in USA.

“The current outlook presents a disappointing scenario, but there are green shoots that indicate a more optimistic outlook,” he said. Tamas Varga, of the PVM oil corridor.

The fact that the price of Brent is $8 above the lows reached at the beginning of June “shows a genuine optimism that the world oil balance will eventually adjust,” Varga added.

News in US inventories

U.S. crude oil inventories rose by 2.264 million barrels in the week ending June 14, market sources reported Tuesday, citing figures from the American Petroleum Institute. Analysts polled by Reuters expected a decline of 2.2 million barrels in crude oil inventories.

On the other hand, inventories of gasoline fell by 1.077 million barrels, while those of distillates rose by 538,000 barrels, said the sources, who spoke on condition of anonymity.

This happens while waiting for official stock data from the Energy Information Administration (EIA) of USA, which will be published this afternoon.

“Larger-than-expected US inventories caused a slight drop in barrel prices,” the analyst at ActivTrades Ricardo Evangelistaadding that supply-side concerns over geopolitical reasons have dominated the oil markets lately. “Given the tug-of-war between future supply and demand expectations, it may be wise not to read too much into this morning’s losses,” he said.

Both benchmarks, which have recovered strongly in the last two weeks, gained more than a dollar in the previous session, reaching seven-week highs, after a Ukrainian drone attack caused a fire at an oil terminal. in an important Russian port.

In Middle East, the Israeli foreign minister, Israel Katz warned of a possible “total war” with Hezbollah in Lebanon, while USA tried to avoid a broader conflict between Israel and the group supported by Iran. An escalation of war could disrupt supplies in this key region for oil production.

The data from China This week’s data showed that industrial production in May fell short of expectations, but retail sales, an indicator of consumption, posted their fastest growth since February.

* In the Middle East, Israeli Foreign Minister Israel Katz warned of a possible “total war” with Hezbollah in Lebanon, as the United States sought to avoid a broader conflict between Israel and the Iran-backed group.

Source: Ambito

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