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Oil Prices Slide as US Gasoline Inventories Surge and Production Slows

Crude oil futures experienced a third consecutive day of decline on Wednesday, August 23, under the weight of mounting concerns about a global manufacturing slowdown impacting oil demand, and apprehension over a substantial increase in US gasoline stockpiles, hinting at potential weakness in American energy consumption.

The West Texas Intermediate (WTI) crude futures observed a 0.9% decline, dropping by 75 cents to reach $78.89 per barrel. Simultaneously, Brent crude futures faced a 0.98% dip, down by 82 cents, settling at $83.21 per barrel.

The US Energy Information Administration (EIA) released data revealing a surprising 1.5 million barrel surge in US gasoline inventories during the previous week, surpassing the expectations of analysts who had predicted a decrease of 900,000 barrels. Additionally, stocks of refined petroleum, encompassing heating oil and diesel, climbed by 900,000 barrels. This was 200,000 barrels higher than what industry experts had foreseen.

Contrary to the gasoline and refined oil increase, US crude inventories experienced a drop of 6.1 million barrels, a significant deviation from the anticipated 2.8 million barrel reduction projected by analysts.

The global manufacturing sector’s sluggishness also cast a shadow on the oil market. Japan’s Purchasing Managers’ Index (PMI) for August reported a third consecutive monthly fall, while the Eurozone’s manufacturing PMI plummeted more than anticipated, particularly in Germany.

In the United States, S&P Global published the preliminary PMI for the country’s manufacturing and services sectors in August, revealing a drop from 52.0 in July to 50.4 – the lowest in six months.

Market participants eagerly anticipate Federal Reserve Chairman Jerome Powell’s address at the annual Jackson Hole meeting on Friday. Beyond that, comments from officials representing the European Central Bank (ECB), the Bank of England (BoE), and the Bank of Japan (BOJ) during the August 24-26 event, themed “Structural Shifts in the Global Economy,” are poised to influence market sentiments.

As oil prices continue to navigate the complex interplay of demand, supply, and global economic dynamics, the focus remains on the delicate balance between production, consumption, and the broader macroeconomic landscape.

The Spot Market is Open

Thursday, August 24, 2023

Updated at


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