West Texas Intermediate crude (WTI) dropped 23 cents, or 0.3%, to $84.17 after reaching a high point not seen since November 2022.
Despite sharp reductions in fuel stockpiles in the US and reductions in Saudi and Russian output, oil prices fell in early Asian trade on Thursday after reaching new highs in the previous session due to worries about the Chinese economy.
After closing the previous session at its highest level since January 27, Brent crude decreased 20 cents, or 0.2%, to $87.35 per barrel by 0006 GMT.
West Texas Intermediate (WTI) crude dropped 23 cents, or 0.3%, to $84.17 after reaching a high point not seen since November 2022.
Since WTI is produced in the United States, primarily in the Permian Basin, it serves as the primary benchmark for oil in North America. Texas is the primary source of the oil. After that, it travels through pipelines to the Midwest and the Gulf of Mexico, where it is refined. Cushing, Oklahoma, serves as the primary delivery location for WTI’s physical exchange and price settlement.
The Cushing hub delivery system consists of 16 storage terminals and 35 pipelines (20 inbound and 15 outbound). The hub stores 13% of the oil stored in the United States and has a storage capacity of 90 million barrels.
The daily capacity for inbound and outbound shipping is 6.5 million barrels. “The Pipeline Crossroads of the World” refers to Cushing.
According to data released by China on Tuesday, crude oil imports dropped 18.8% from June to July, reaching their lowest daily rate since January.
As the world’s second-largest economy struggled to revive demand, China’s consumer sector also experienced deflation in July, and factory-gate prices continued to decline.
Although distillate inventories, which include diesel and heating oil, fell by 1.7 million barrels last week, versus analysts’ expectations in a Reuters poll for both to hold mostly steady, prices were supported by government data released on Wednesday that showed U.S. petrol stocks fell by 2.7 million barrels.
The top exporter Saudi Arabia’s intention to extend its voluntary production cut of 1 million barrels per day for an additional month, to include September, also helped to support prices. Russia also announced a 300,000 bpd reduction in oil exports for September.
Additionally, investors were anticipating Thursday’s release of the U.S. Consumer Price Index (CPI), which is expected to show a slight year-over-year acceleration.