Oil prices fell this morning, Wednesday, affected by the release of a report indicating a rise in US inventories.
Investors’ fears also affected oil prices, as the possibility of the United States defaulting on its debt payments led to investors to withdraw their money from high-risk assets.
US West Texas Intermediate crude fell 1.5 percent to $74, reversing Tuesday’s gains, while Brent is trading lower by the same percentage below $78.
US crude stocks expanded by more than 4 million barrels last week, according to the industry-funded American Petroleum Institute.
It would be the first increase in stocks nationwide in eight weeks, if confirmed by government data later on Wednesday.
Oil prices rose recently as demand rebounded amid also strong gains for natural gas.
The rally lifted the price of global benchmark Brent crude above $80 a barrel for the first time in three years, before also reversing Tuesday’s gains.
During a Senate hearing, both Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen warned that a default in the United States due to the failure to raise the debt ceiling would have dire consequences.
Without action, Yellen said, her administration will effectively run out of funds on October 18. Global stocks and commodities declined as investors became more cautious.
Energy prices this month have raised government concerns and speculation that the Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+) may ease supply curbs at a faster pace.
Fears and speculations
The surge in energy prices this month has raised concerns in governments, as well as speculation that the OPEC+ may ease supply curbs at a faster pace.
“There is likely to be a lot of profit taking because we have seen an extraordinary price hike,” said Andrew Lebow, president of Houston-based consultancy Lipow Oil Associates.