Oil prices retreated from their highest close in twelve weeks on Wednesday after reports from the American Petroleum Institute reflected an increase in U.S. stockpiles by 1.41 million barrels, to 447 million barrels. This finding was a stark contrast to predictions by Bloomberg analysts who expected a decline in stockpiles by 3 million barrels. Reuters analysts predicted a decrease of 2.8 million barrels. Oil prices have been trading near three-month highs recently and just last week were boosted further by a decision by the Organization of Petroleum Exporting Countries (OPEC) and its allies and its allies to cut production cuts by another 500,000 barrels per day for at least Q1 2020.
U.S. WTI futures were down 0.64 percent as of 12:00 p.m. GMT on Wednesday, to $58.86 per barrel. Brent crude futures were down 0.79 percent to $63.83 per barrel. Oil prices have been especially vulnerable to the U.S.-Sino trade war, as analysts have remained concerned that a drawn-out trade war could reduce demand. Lower demand, coupled with an increase in U.S. stockpiles could keep prices low, despite OPEC’s best efforts to bolster prices.
With the next trade deadline looming and conflicting reports about whether a deal will be struck in time, oil remains caught in the cross-hairs of the trade war, and prices will continue to remain vulnerable to these diplomatic developments.
According the Energy Information Administration (EIA), whose official report will be out later on Wednesday, the U.S. is on track to become a net exporter of crude and fuel for the first time in 2020, thanks in large part to the country’s production surge which has reduced its dependence on imported oil.
In other industry news, Saudi Aramco, the world’s largest initial public offering (IPO) crushed expectations, with its debut on the Saudi Tadawul stock exchange on Wednesday morning. Shares of the company’s stock surged 10 percent, giving the company a valuation of $1.88 trillion, and making it the largest listed company in the world, with a valuation significantly higher than that of Apple and Microsoft.