Oil took a breather in early trade on Wednesday in Asia ahead of the anticipated rise in crude inventories in the U.S. A fear of rate hikes following the efforts made by central banks around the world to rein-in inflation has also contributed to the slight relief.
Price movement: Brent crude prices fell 0.5% to $106.96 a barrel, while the US West Texas Intermediate (WTI) crude fell 0.6% to $103.53 per barrel.
Rise in stockpiles: US crude stocks increased by about 1.9 million barrels for the week-ended July 15, a Reuters report noted. Official weekly crude and fuel inventory data from the US Energy Information Administration (EIA) is expected on Wednesday.
Recent trends: Crude prices have been witnessing a see-saw movement in recent days as it is caught between supply concerns and the efforts put in by global central banks to tame inflation. Any hike in interest rates by the Federal Reserve to rein in inflation is likely to be followed by outflows from riskier assets like commodities.
Upcoming triggers: The OPEC+ alliance that includes Russia is set to meet on August 3. Saudi officials have confirmed the decision on pumping more oil would be taken within the framework of OPEC+, reports Zawya.
Following the Russia-Ukraine war, the U.S. is trying to impose sanctions against Russia to prevent it from exploiting its oil revenues. However, Saudi Arabia has been crystal clear about its commitment to the OPEC+ coalition.
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