Photo: Getty images
On 14 May, oil prices declined amid an expected increase in US stockpiles, despite a temporary lull in global trade tensions. Analysts point to the market’s cautious optimism.
On Wednesday, 14 May, global oil prices declined, despite hitting a two-week high a day earlier. The main reason was information about a significant increase in crude oil reserves in the United States. This was reported by Reuters.
Brent fell by $0.39 (-0.6%) to $66.24 per barrel.
WTI lost $0.36 (-0.6%) to $63.31 per barrel.
The day before, both benchmarks rose by more than 2.5% due to news of a 90-day truce in the US-China trade war. According to the agreement, Washington reduced tariffs from 145% to 30%, and Beijing from 125% to 10%.
“The economic pause may have created a narrative for a recovery in demand,” said Priyanka Sachdeva, an analyst at Phillip Nova. At the same time, she stressed that expectations of inventory growth are limiting market optimism.
According to the American Petroleum Institute, crude oil inventories increased by 4.3 million barrels in the week ended 9 May. Official data is due to be released later today by the US Energy Information Administration (EIA).
Sanctions, the Persian Gulf and the uncertainty around Iran
The visit of US President Donald Trump to the Gulf countries is attracting special attention from investors. In Riyadh, he announced the lifting of sanctions against Syria and $600 billion in investments from Saudi Arabia.
Mukesh Sahdev, chief expert at Rystad Energy, said that keeping oil prices from spiking during the summer season is a key goal of the US, and Washington can use this period to replenish its strategic oil reserve.
However, the market remains uncertain about Iran, Russia, and Venezuela. The US imposed new sanctions on 20 companies involved in Iranian oil exports to China. This happened after the fourth round of talks between the US and Iran in Oman over the nuclear programme.
