Oil prices increased for the first time in four sessions following an industry report indicating a fifth consecutive week of declines in US crude stockpiles.
Brent crude for October delivery climbed above $78 per barrel, recovering from a 4.1% drop over the previous three days. Meanwhile, West Texas Intermediate (WTI) approached $75 per barrel. The American Petroleum Institute reported a decrease of 4.5 million barrels in crude inventories last week, as per sources familiar with the data. Should official figures confirm this decrease later on Wednesday, it would represent the longest streak of inventory drawdowns since January 2022.
Despite this recent uptick, crude oil is poised for its most significant monthly decline of the year, largely due to a weakened demand forecast from China, the world’s largest oil importer. However, futures have seen modest gains this year, supported by OPEC+ production cuts and anticipated interest rate reductions by the Federal Reserve.
The Federal Reserve is expected to maintain current interest rates during its meeting later Wednesday. Market participants are keenly awaiting comments from Chair Jerome Powell for any indication of potential rate cuts in September. Additionally, geopolitical tensions in the Middle East are under scrutiny, following Israel’s airstrike on Beirut that killed a senior Hezbollah commander. This action was reportedly in response to an attack in the Golan Heights that resulted in the deaths of 12 individuals over the weekend.
