Oil prices fell on Wednesday after rising in the previous three sessions, but it a limited loss on the view that global supply tightness will continue. Limited room for major producers such as Saudi Arabia to boost production. U.S. West Texas Intermediate (WTI) crude futures slid 44 cents, or 0.4%, to $111.32 a barrel at 0150 GMT, giving up earlier gains.
“Investors made position adjustments but remained bullish on expectations that Saudi Arabia and the United Arab Emirates could not raise output significantly to meet recovering demand. This is driven by a pickup in jet fuels,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
Saudi Arabia and the UAE are the only two members of the Organization of the Petroleum Exporting Countries (OPEC). Who are with spare capacity to make up for lost Russian supply. And also weak output from other member nations.
OPEC’s oil revenue surged in 2021 as prices and demand recovered from the worst of the COVID pandemic. While the number of its members’ active rigs posted a modest rebound and new completed wells declined, data from the group showed.
Inventory data in the U.S. provided some sense of improving fuel supply though. Stockpiles of gasoline for the week ending June 24 rose by 2.9 million barrels. And distillate fuel supplies increased by 2.6 million barrels, according to market sources citing American Petroleum Institute figures. However, crude inventories fell 3.8 million barrels.