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Thursday, February 29, 2024

Oil prices rise amid concerns about US inventories

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Oil prices on the New York Stock Exchange are rising for another session, and the commodity is valued at around $81 a barrel. Investors’ attention is shifting from the OPEC+ decision to fuel stocks in the United States.

A barrel of West Texas Intermediate crude for deliveries on V trades at $80.98 at NYMEX in New York, up 0.33 percent from the previous year.

Brent crude oil on ICE for June deliveries is priced at USD 85.30 per barrel, up by 0.42 percent.

U.S. Stocks

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Investors are turning their attention to fuel stocks in USAwhere the American Petroleum Institute (API) calculated in the latest data that oil inventories fell last week by 4.3 million barrels.

At the Cushing hub in Oklahoma, oil inventories decreased last week by 1 million barrels, according to an API report.

Gasoline inventories fell by 4 million barrels and distillate fuel inventories fell by 3.7 million barrels, API said.

On Wednesday, investors will get to know the official data on US crude oil inventories, which are released weekly by the Department of Energy (DoE).

For the time being, the recent surprising decision of the OPEC+ countries – to cut oil supplies from May to the end of this year by more than 1 million barrels – is on the back burner, but in the first 2 days of this week it caused an increase in oil prices in the US by almost 7%.

Since the lowest level recorded in March this year, when the banking crisis hurt market sentiment, oil in the US has already increased by more than a quarter.

Weaker results from the US labor market

Meanwhile, investors are not discouraged by weaker data from the US labor market, released on Tuesday.

The number of unfilled jobs in the US, according to the JOLTS survey, in February amounted to 9.931 million against 10.563 million recorded a month earlier after a revision from 10.824 million, according to the Bureau of Statistics of the US Department of Labor.

The number of job vacancies was expected to amount to 10.4 million.

“It seems that oil markets have noticed the consequences of a weaker US labor market situation, but players do not seem to be put off by this,” said Vishnu Varathan, head of Asia strategy and economics at Mizuho Bank Ltd.

Main photo source: RachenStocker/Shutterstock

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