- Oil prices decline for the third consecutive day, to reach levels near $87.
- Fears about a decline on demand from China are weighing on prices.
- US crude stockpiles increased above expectations last week.
Front-month WTI crude futures are depreciating for the third consecutive day on Wednesday. Concerns about a potential decline in demand from China, as COVID-19 infections increase, are hurting oil prices.
The US benchmark WTI dives about 1.3% on the day, reaching levels at $87.20 at the moment of writing, a nearly 7% sell-off from Monday’s peak, at $93.70.
US crude oil stockpiles increase beyond expectations
A Reuters report citing the American Petroleum Institute affirmed that US oil stocks increased by 5.6 million barrels in the week of November 4, well above the 1.4 million barrel rise expected by the market, which has added negative pressure on crude oil.
Investors remain wary about the possibility of new lockdowns in China after the country’s authorities reiterated their commitment to the Zero-COVID policy over the weekend. With coronavirus infections increasing with the winter flu season around the corner, a new set of restrictions is expected to curb global demand for oil over the coming months.
Beyond that, the US dollar steadied on Wednesday, after having depreciated sharply over the last three days, which has contributed further to the WTI decline. The Dollar Index, which measures the value of the dollar against a basket of the most traded currencies, has ticked up to the vicinity of 110.00 after bouncing off 109.30, its lowest level since mid-September.