Crude oil prices were down on Wednesday over an estimated increase in US oil inventories as demand from refineries was curtailed after an unprecedented cold front that hit the country’s biggest oil-producing state of Texas.
International benchmark Brent crude was trading at $64.24 per barrel at 0656 GMT for a 0.37% decrease after closing Tuesday at $64.48 a barrel.
American benchmark West Texas Intermediate (WTI) was at $61.28 per barrel at the same time for a 0.63% drop after it ended the previous session at $61.67 a barrel.
Late Tuesday, the American Petroleum Institute (API) announced its estimate of a rise of over 1.03 million barrels in US crude oil inventories relative to the market expectation of a 5.3 million-barrel fall.
If crude stocks increase in line with the API’s expectations, it signals that crude demand is falling in the US, the world's largest oil consumer, to negatively affect oil prices.
The estimated rise in oil inventories was mainly caused by a lack of demand from refineries in Texas after the US state’s oil production fields were caught unprepared in an unprecedented cold front that lasted almost a week, bringing 65% of production to a halt.
Later on Tuesday, the US Energy Information Administration (EIA) is expected to release a report on last week’s crude inventories.
Negative predictions on a timely economic recovery in the US also weighed on prices.
US Federal Reserve Chair Jerome Powell said the focus needed to remain on an economic recovery that is "uneven and far from complete," and which would need the central bank's help for "some time" to get back to full employment.
"The economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved," Powell said.
(Anadolu Agency, February 24, 2021)
