The oil market took a dip on Wednesday due to decreased worries over conflict in the Middle East and slowing business activity in the world’s largest oil consumer. However, a decline in U.S. crude oil inventories helped limit these losses. Brent crude futures dropped 27 cents to $88.15 a barrel by 11:30 a.m. EDT, while U.S. West Texas Intermediate crude futures fell 38 cents to $82.98.
In recent weeks, Brent had gained ground due to a weaker U.S. dollar, but some of those gains were reversed this week as concerns about geopolitical tensions in the Middle East eased slightly. Tim Snyder, an economist at Matador Economics, noted that the fundamentals suggested a calming down in the region, potentially removing $5-10 per barrel from prices in the coming months.
U.S. crude stockpiles saw a significant drop of 6.4 million barrels to 453.6 million barrels in the week ended April 19, against analysts’ expectations for a rise of 825,000 barrels. UBS analyst Giovanni Staunovo pointed out that this large draw was due to very high crude exports, although preliminary tanker tracking data showed lower exports than expected earlier in the week.
In addition to concerns about geopolitical tensions in the Middle East, global economic growth also slowed down in April as U