However, losses were limited by expectations of solid demand this year and a weaker dollar.
API Data Reveals 4x Increase in U.S. Crude Stockpiles
Data from the American Petroleum Institute (API) showed that U.S. crude stockpiles surged by more than four times in the first week of 2023 from the prior week. There also appeared to be a minor release of oil from the Strategic Petroleum Reserve.
The slowdown in Retail Demand
The increase in stockpiles comes as refiners began to build inventories for the new year. But expectations for increased gasoline and distillate stockpiles also showed some slowdown in retail demand, as a bulk of the country grapples with adverse winter weather conditions.
Brent and WTI Futures Dip
Brent oil futures crept lower to $79.54 a barrel, while West Texas Intermediate crude futures fell 0.8% to $74.56 a barrel by 21:03 E.T. (02:03 GMT).
Factors Affecting Oil Prices
Crude prices had marked a solid start to the week after China, the world’s largest crude importer, reopened its borders and relaxed most of its anti-COVID measures, which is expected to spur a sharp economic recovery this year. A U.S. government forecast also aided oil prices. Global petroleum demand is set to hit a record high in 2023, with consumption set to grow on economic strength in India and China.