Oil’s price rise continued to slow on Wednesday after the commodity posted a two-day decline this week. The reason for this is a report that US reserves of “black gold” have decreased, writes Bloomberg.
European Brent crude fell 0.21 percent, or $0.19, to $90.59 a barrel
The price of the US benchmark West Texas Intermediate (WTI) decreased by 0.19%, or 0.17 dollars, to 89.19 dollars per barrel.
The American Petroleum Institute announced another decline in reserves at the key U.S. storage hub of Cushing and a 2 million barrel reduction in national inventories, according to people familiar with the data. Official statistics are due to be released by the Energy Information Administration later Wednesday.
Oil’s rally cooled this week after a series of weekly gains that took the price of “black gold” to a seven-year high. The price rise was supported by stronger-than-expected demand, supply disruptions and geopolitical tensions – specifically between Russia and Ukraine.
The price of crude is poised to hit $100 a barrel as refiners in India increase purchases to meet annual supply targets – a move that could also help drive the price higher.
However, rising crude oil prices are a challenge for consumer countries and central banks as they try to contain inflation without damaging economic growth.
White House economic adviser Jared Bernstein said in an interview with CNN that releasing more oil reserves “is an option that could be considered” to cool rising gasoline prices. However, this tactic is currently having little effect – the price of fuel has reached its highest level in over seven years.
“While market sentiment is still largely upbeat, there are a number of developments that could lead to further downward pressure,” ING Groep NV’s head of commodity strategies Warren Patterson said. A calming of the situation in Ukraine or progress in negotiations with Iran on the nuclear deal could lead to lower commodity prices, he said.