ICE Brent prices fell again yesterday and stabilized around $88 a barrel, as the risk premium has decreased. Crude oil prices have lost almost half of the gains made after the Hamas attack on Israel. The risk of an escalation cannot be ruled out, but economic concerns weigh on prices in the short term.
The American Petroleum Institute’s weekly report was largely supportive of the oil market. API reported that US crude oil inventories decreased by 2.7 million barrels over the past week, higher than market expectations of around 0.5 million barrels. Cushing crude oil stocks are reported to have increased by 0.5 million barrels. On the products side, API reported that gasoline and distillate inventories fell 4.2 million barrels and 2.3 million barrels, respectively.
Western Canada Select Crude Oil’s discount to the WTI benchmark rose to US$24.5/bbl this week, the biggest discount since January 2023, as Canada’s crude oil supply continues to improve in due to limited pipeline capacity. After significant supply disruptions during the second quarter of the year due to wildfires, crude oil production has been steadily recovering, increasing the average availability of crude oil for shipments, which, in turn, affected prices.