Oil prices held steady on Wednesday, as investors weighed a larger-than-expected build in U.S. crude inventories against ongoing concerns about global demand.
According to the U.S. Energy Information Administration, crude stockpiles rose by 2.4 million barrels last week, higher than analysts’ expectations of a 1.8 million barrel increase. This uptick in inventories comes as the U.S. continues to ramp up production, hitting record levels of 12.2 million barrels per day.
Despite the build in U.S. stockpiles, oil prices remained relatively stable, with Brent crude holding at around $71 per barrel and WTI at around $63 per barrel. This resilience can be attributed to ongoing supply cuts by OPEC and its allies, as well as geopolitical tensions in key oil-producing regions like Venezuela and Iran.
However, concerns about weakening global demand continue to weigh on the market. The ongoing trade war between the U.S. and China has raised fears of a slowdown in economic growth, which could dampen oil consumption. Additionally, rising tensions in the Middle East and uncertainty surrounding Brexit are adding to market jitters.
Investors will be closely watching the upcoming OPEC meeting in June, where members will decide whether or not to extend production cuts beyond their current expiry date in June. The outcome of these discussions could have a significant impact on oil prices in the coming months.
Overall, while oil prices are holding steady for now, the market remains fragile and susceptible to sudden shifts in supply and demand dynamics. Investors will need to keep a close eye on both macroeconomic factors and geopolitical developments to navigate the uncertain terrain of the oil market.