Oil prices rose on Wednesday (May 15) after US domestic crude oil inventories fell more sharply than expected.

Specifically, data from the US Energy Information Administration (EIA) showed that commercial crude oil inventories, excluding strategic petroleum reserves (SPR), dropped by 2.5 million barrels last week, much higher than the forecasted decline of 543,000 barrels by analysts polled by Reuters.

Oil prices had dropped earlier in the session after the International Energy Agency (IEA) lowered its global demand growth forecast by 140,000 barrels per day to 1.1 million barrels per day due to weakened demand in developed economies during the first quarter.

WTI and Brent oil prices have fallen by 4% and 5.82%, respectively, since the beginning of the month.

At the close of trading on May 15, WTI crude oil futures rose by 61 cents (equivalent to 0.78%) to $78.63 per barrel. Brent crude oil futures added 37 cents (equivalent to 0.45%) to $82.75 per barrel.

Global crude oil inventories increased by 34.6 million barrels in March due to trade disruptions that pushed oil prices to their highest levels since the pandemic, according to the IEA. Oil shipments have been rerouted this year due to Houthi rebel attacks on the Red Sea shipping route.

According to the IEA, crude oil inventories will continue to increase in April as oil shipments arrive at ports, leading to a rise in onshore inventories.

OPEC+ is likely to closely examine global inventories to assess the balance between supply and demand at its June meeting. Some OPEC+ members have voluntarily cut production by 2.2 million barrels per day to support oil prices.

Source: Vietstock