Oil Declining as Demand Concerns Outweigh decline in US Inventories

Oil prices fell on Wednesday, August 19, due to fears that fuel demand in the United States may not recover as quickly as expected in light of the faltering talks on a stimulus package for the economy, overshadowing an exceeded expectations decline in US crude stocks.

With investors keeping their sights on the meeting of a ministerial committee of major producers later today, Brent crude futures fell 40 cents, or 0.9%, to $ 45.06 a barrel by 07:01 GMT, after rising 9 cents on Tuesday.

US West Texas Intermediate crude futures fell 34 cents, or 0.8%, to $ 42.55 a barrel, after closing unchanged in the previous session.

Data from the American Petroleum Institute after the markets closed on Tuesday showed that US crude oil inventories fell by 4.3 million barrels to about 512 million barrels, more than analysts’ expectations of a 2.7 million barrel decline. The Petroleum Institute said gasoline stocks rose.

Investors are awaiting news from Wednesday’s meeting of a ministerial committee of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC +, which is set to review compliance with an earlier agreement on reducing oil production.