Khaberni - Oil prices dropped on Wednesday as investors digested weak economic data from major oil importers, but a projected decrease in U.S. inventories limited further losses.
According to Reuters, Brent crude futures fell by 37 cents, or 0.6%, to reach $64.07 a barrel by 14:19 GMT, while West Texas Intermediate futures in the U.S. fell 43 cents, or 0.7%, to $60.13.
Giovanni Staunovo, an analyst at UBS, said that oil prices followed the stock market, with risk aversion being a significant driver in recent days.
Tamas Varga, an analyst at PVM, added that weaker economic data alongside a strengthening dollar prevented oil from making substantial gains, while prices found support from a decrease in U.S. inventories.
Factory activity in China contracted for the seventh month in October, while the manufacturing sector in the United States shrank for the eighth consecutive month during the same period.
The dollar index, which measures the performance of the U.S. currency against other major currencies, climbed to its highest level in three months, supported by divisions within the Federal Reserve (the U.S. central bank), indicating lower chances of an interest rate cut in December.
The rise of the dollar makes oil, priced in U.S. currency, more expensive for holders of other currencies, which may affect demand, while typically, a cut in U.S. interest rates boosts demand for crude.
According to data from the American Petroleum Institute released on Tuesday, crude inventories increased by 6.52 million barrels, while gasoline inventories fell by 5.65 million barrels and distillate stocks decreased by 2.46 million barrels for the week ending on October 31.
On the supply side, two sources and shipping tracking data from the London Stock Exchange group revealed that the Russian port of Taman on the Black Sea suspended fuel exports, and its oil refinery ceased crude processing following drone attacks by Ukraine on its infrastructure on Sunday.
A source and calculations from Reuters indicated that Kazakhstan's crude oil production, excluding gas condensates, fell by 10% last month to 1.69 million barrels per day, but it still exceeds the production quota set by the OPEC+ alliance.
The alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allied producers, agreed on Sunday to increase production by 137,000 barrels per day in December, with the decision to suspend any further increase in the first quarter of 2026.
