Oil futures finished lower on Thursday for a third consecutive session, continuing a downtrend that started the week prior. The loss follows a more than 16 million-barrel weekly increase in U.S. crude inventories reported by the Energy Information Administration on Wednesday. This increase in supply has impacted the market and prices have been knocked away from the top of the downtrend channel.
The U.S. benchmark West Texas Intermediate (WTI) crude for March delivery (CLH23) fell by 0.74% to settle at $78.49 a barrel on the New York Mercantile Exchange. This marks the third consecutive session of losses for WTI.
Analysts at Zaner wrote in Thursday commentary that the supply side of the equation remains very bearish and will likely continue to impact prices. This is especially true if Chinese energy demand hopes are dampened.
The Energy Information Administration (EIA) reported a 16 million-barrel increase in crude inventories for the week ending on February 12th. This marks the sixth consecutive week of increases in U.S. crude inventories. The increase in supply has weighed on prices, as the market has been unable to absorb the additional supply.
The global market is also feeling the effects of increased supply. The International Energy Agency (IEA) reported that global oil inventories rose by 1.2 million barrels per day (bpd) in January, marking the fourth consecutive month of increases. This increase in supply has weighed on prices, as the market has been unable to absorb the additional supply.
The oil market is also being impacted by the ongoing trade dispute between the United States and China. The dispute has weighed on demand for oil, as the countries have imposed tariffs on each other’s goods. This has dampened the outlook for energy demand, which has weighed on prices.
The market is also being impacted by geopolitical tensions in the Middle East. Tensions between the United States and Iran have been escalating in recent weeks, raising the risk of a conflict in the region. This has added to the bearish sentiment in the market, as investors are concerned about the potential disruption to global oil supplies.
Overall, the supply side of the equation remains very bearish and is likely to continue to weigh on prices. This is especially true if Chinese energy demand hopes are dampened. The ongoing trade dispute and geopolitical tensions in the Middle East are also contributing to bearish sentiment in the market. As long as these factors remain, the outlook for oil prices remains uncertain.