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Highlights
- Crude oil prices dip on Wednesday.
- US crude stockpiles rose significantly by 4.6 million barrels during the last week.
- The production in the US has failed to reach 2019 levels.
Crude oil prices dip on Wednesday followed by a rapid jump in US crude oil inventories, despite OPEC’s plan to add supply slowly into the market. December delivery Brent Crude oil futures last traded at US$77.97 per barrel up 0.04%, whereas November delivery WTI crude oil futures traded 0.08% down at US$74.77 per barrel as of 30 September 2021 at 10:40 AM AEST.
US crude stockpiles rose significantly by 4.6 million barrels during the last week due to a solid recovery in the operations of the US Gulf Coast followed by two consecutive storms in the region. Both the benchmarks have gained more than 80% in the last one year.
Related read: A look at five ASX oil and gas stocks amid OPEC’s plan to gradually hike output
Rising US dollar impacting oil prices
Additionally, a rise in the US dollar, hitting highs of one year against a basket of other major currencies. A higher US dollar makes oil expensive for other currency holders.
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Crude oil prices have been recovering at a faster pace due to a solid recovery from global lockdowns and a rise in energy demand amid tight supplies from a few of the nations.
However, the production in the US has failed to reach 2019 levels. The supplies rose to nearly 13% in 2019. Additionally, the production from shale has also been slow.
As per the data released by the U.S. Energy Department, the stockpiles of US gasoline, oil, and distillates rose in the last week to 11.1 million barrels per day.
Must Read: Oil falls on US crude oil recovery
OPEC along with its allies, together known as OPEC+ is likely to stick with its plan to add 400,000bpd to its output for November.
Bottom Line
Crude oil dips on Wednesday due to a rapid surge in the US crude oil inventories and a rise in the US dollar.
