After its weekly US oil data, the Brent weakened more from the previous $70 mark in crude inventories and record production. Also, prices in oil fell on its second day on Tuesday.
On Wednesday, after touching $69.96 its highest since November 12, Brent slipped 6 cents. Its last close was above $70, Brent futures dropped 3 cents at $69.28 a barrel.
After briefly hitting $62.99, also the highest since November, the U.S. West Texas Intermediate crude slipped 8 cents, or 0.1 percent, to $62.38 a barrel. The contract fell 12 cents in the last close.
This year a growth of nearly 30 percent in the Global benchmark Brent was made. At the same time, there was a surge of nearly 40 percent in the West Texas Intermediate. Prices have been supported due to signs of demand rising up and global supplies are tightening.
Referring to supply cuts by The Organization of the Petroleum Exporting Countries and others, along with sanctions on Iran, chief market strategist at CMC Markets in Sydney Michael McCarthy said, “There is a clear bias to the upside with the supply restrictions.”
“And there’s a much-better-than-expected demand picture after the recent China and U.S. PMI numbers, along with a potential kicker from any U.S.-China trade agreement.”
Last week in Beijing, trade talks between the United States and China made “good headway”. On Wednesday, White House economic adviser Larry Kudlow said the two sides aim to bridge differences during further talks.
The deal between the Organization of the Petroleum Exporting Countries and allies such as Russia, known as OPEC+, supported the crude oil in reducing oil output this year by about 1.2 million bpd.
Earlier this week, a senior Trump administration official said that the U.S. pressure on Iran is increasing, while Washington is considering more sanctions on the Middle Eastern country.
Virendra Chauhan, oil analyst at Energy Aspects in Singapore said the refinery maintenance season is also ending and that will provide further demand for crude.
He also added, “The physical market is very strong, and we are now starting to trade post-turnaround barrels, which should mean physical markets strengthen and flat prices should follow.”
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