Oil Declines as U.S. Inventories Rise and Supercycle Ruled Out

Oil prices declined on Wednesday amid continuous concerns about the recovery of global demand, as well as the fourth consecutive weekly rise in U.S. crude inventories.

Brent crude futures for May delivery closed lower by about 0.6% at $67.98 per barrel.

Meanwhile, the West Texas Intermediate (WTI) crude futures for April delivery fell by 20 cents, or 0.3%, and settled at $64.60 per barrel.

Earlier today, the International Energy Agency (IEA) said that crude oil’s sharp rally to near $70 a barrel has spurred talk of a new supercycle and a looming supply shortfall, noting that their data and analysis suggest otherwise.

The IEA suggested that the global demand for oil would not return to its pre-pandemic levels until 2023, unless governments support the transition to clean and renewable energy sources, which would mean that oil demand has already peaked in 2019.

The weekly report of the U.S. Energy Information Administration (EIA) showed today that crude oil inventories increased by about 2.4 million barrels last week to 500.8 million barrels. Meanwhile, gasoline inventories increased by 0.5 million barrels, while distillates stockpiles increased by 0.3 million barrels