Oil prices retreated during the Asian trading session despite the decrease in US crude inventories and the approach of Hurricane Florence to the country’s east coast. On Wednesday, US crude inventories decreased by 5.3 M in the week to September 7 yo below 4 M barrels, which is the lowest since February 2015 and around 3% below the five-year average for this time of year, according to a report from the U.S. Energy Information Administration (EIA).
Moreover, on Wednesday the U.S. Department of Energy released preliminary estimates which indicated that the country has become the world’s largest producer of crude oil for the first time since 1973. Additionally, OPEC has also published a report in which it lowered world oil demand growth for 2018 by around 20 K bpd, due to the slower than expected performance in Latin America and the Middle East in the second quarter.
Oil prices retreated reversing some of the strong advances from the prior session as economic concerns raised doubts about ongoing fuel demand growth. The retreat was due to concerns of a potential slowdown in fuel demand growth because of trade disputes between the United States and China, which are the world’s two largest oil consumers.
American companies in China are being hurt by tariffs in the growing trade war between Washington and Beijing, according to a survey of hundreds of firms, prompting the U.S. business lobbies behind the poll to urge the Trump administration to reconsider its approach.
New York-traded WTI crude futures trade at $69.30 a barrel. Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S. trades at $79.00 a barrel.