Oil Prices Falling Due to a Sudden Increase in US Crude Inventories

Oil prices fell on Wednesday, February 24, after data for the sector showed a sudden increase in US crude inventories last week, as freezing weather in southern states limited the demand for refineries that were forced to close.

The American Petroleum Institute said on Tuesday that crude inventories increased 1 million barrels in the week ending February 19, compared with estimates of a decrease of 5.2 million barrels in a Reuters poll.

The institute data showed that the rate of crude consumption by refineries decreased by 2.2 million barrels per day.

US West Texas Intermediate crude futures fell 56 cents, or 0.9%, to $ 61.11 a barrel, after falling three cents on Tuesday.

Brent crude futures fell 35 cents, or 0.5%, to $65.02 a barrel, erasing gains of 13 cents made on Tuesday.

Investors will await confirmation from the US Energy Information Administration later today that crude inventories increased last week, despite the blow to shale crude production received in unprecedented weather.

The decline in prices is considered a respite after the rise in Brent and West Texas Intermediate crude, by more than 26%, to its highest level in 13 months.

Prices jumped due to disruptions in US supplies and supply compliance by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, the so-called OPEC + group, led by an additional cut by Saudi Arabia of one million barrels per day.