Oil prices steady as US inventory draw soothes demand fears

July 17, 2024 12:26 PM AEST | By Investing

Oil prices steady as US inventory draw soothes demand fears

US inventories shrink more than expected- API

U.S. oil inventories saw a bigger than expected draw in the week to July 12, data from the American Petroleum Institute showed on Tuesday.

Inventories fell 4.4 million barrels, compared to expectations for a draw of 33,000 barrels.

The API data usually heralds a similar reading from official inventory data, which is due later on Wednesday. It also heralds a third consecutive week of draws in U.S. inventories, as travel demand picked up during the summer season.

Oil supply risks remain in focus, but demand concerns weigh

Oil prices also steadied as traders remained on watch for any potential supply disruptions due to geopolitical tensions in the Middle East.

Israel continued to carry out strikes on Gaza, keeping tensions with Hamas and Hezbollah elevated. Yemeni groups were also seen carrying out repeated strikes on vessels in the Red Sea, potentially disrupting crude shipments.

This saw traders attach some risk premium to oil prices, although it remained unclear just how much of an impact the disruptions in the Middle East were having on crude.

Media reports this week showed that Russia and members of the Organization of Petroleum Exporting Countries reiterated their intentions to limit production and tighten global oil markets.

Still, concerns over slowing Chinese demand, following a string of weak economic readings from the country, kept oil prices under pressure.

Data last week also showed that crude imports to China fell sharply in June.

This article first appeared in Investing.com

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