Crude oil prices erased their gains from Tuesday, trading more than 2% lower in mid-session trading on Wednesday, April 23, affected by the desire of some OPEC+ countries to increase production. Inventories also rose slightly, with US crude (NYMEX) falling about 2.05% to trade at $62.25 a barrel, while Brent crude traded at $66.09 a barrel, down about 1.90%.
A Reuters report released just moments ago indicated that three sources familiar with OPEC+ talks indicated that several OPEC+ members want the group to agree to another accelerated increase in production for June. This request comes against the backdrop of a dispute among members over adherence to production quotas.
The Kazakh Energy Minister indicated this morning that his country would prioritize national interests over the interests of the OPEC+ group, sending a negative signal that his country would produce more than its allocated quota, angering OPEC+ members. Meanwhile, data released just moments ago by the US Energy Information Administration showed a rise in US crude oil inventories of 200,000 barrels in the week ending April 18, compared to expectations of a 1.6 million barrel increase. Gasoline inventories fell by about 4.5 million barrels, and distillate stocks, which include heating oil and diesel, fell by about 2.4 million barrels.
In a related development, the Executive Director of the International Energy Agency, Fatih Birol, indicated this morning that the agency expects further pressure on crude prices with the increase in new production and expectations of a slowdown in production in the world’s largest crude oil consumer.
Crude prices rose more than 2% on Tuesday after Trump’s statements eased market concerns about the independence of the US Federal Reserve, in addition to the Treasury Secretary’s statements that supported markets regarding the trade war with China.
The United States imposed new sanctions on an Iranian energy sector leader, which raised market concerns about Iranian supplies and had a positive impact on crude prices during yesterday’s session.