Crude oil prices in the US opened lower on Thursday as concerns over slowing economic growth overshadowed the news of a larger-than-expected drop in weekly crude inventories.
At the time of writing, crude futures on the New York Mercantile Exchange fell to $74.5 per barrel, while on London’s Intercontinental Exchange, Brent dropped to $78.09 per barrel. The decline in crude inventories was much larger than expected, with US crude supplies falling by 5.1 million barrels for the week ended April 21, compared to a draw of 4.6 million barrels in the previous week. However, the focus remained on apprehensions about the impact of a slowdown in the US economy on energy demand.
Read more: Crude oil prices slide amid concerns over interest rates, fuel demand
Gasoline inventories fell by 2.4 million barrels, while supplies of distillates, which include diesel and heating oil, dropped by 576,000 barrels. However, this was short of expectations for a decrease of 839,000 barrels.
Additionally, refinery activity edged up to 91.3% of capacity last week from 91% in the prior week, with crude inputs averaging about 15.83 million barrels per day, down 11,000 barrels from the prior week, according to data from the Energy Information Administration.
Despite the mostly positive inventory data, investors with a short-term focus have dominated trading due to the lack of strong signals from fundamental data. Brent crude has remained around levels seen just before OPEC surprised markets with an output cut in early April, according to ANZ Research. Traders are also hesitant to make big bets ahead of the Federal Reserve’s upcoming meeting on May 2-3, which is expected to culminate in the final rate hike for the year.
According to experts, the decline in crude oil prices shows that concerns about economic growth continue to affect the energy sector. While the drop in crude inventories was larger than expected, it failed to offset the broader concerns about the impact of a slowdown in the US economy on energy demand.
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