Crude oil and refined product prices experienced significant declines on Wednesday, heading towards a second consecutive day of sharp losses.
At approximately 12:30 p.m. ET, crude prices dropped by over $2 per barrel. Gasoline futures were also facing a pullback of around 4 cents per gallon.
Declines in ULSD Futures
The most notable declines were observed in ULSD futures. The NYMEX December contract witnessed a decrease of 7.91 cents, reaching $2.7593 per gallon. Similarly, the January contract fell 7.2 cents to $2.7065 per gallon.
The front-month RBOB contract experienced a decline of 3.97 cents, reaching $2.128 per gallon. The January contract also decreased by 4.06 cents to $2.1121 per gallon.
U.S. Crude Prices Plummet
On Tuesday, U.S. crude prices hit their lowest levels in more than three months. The decline continued unabated on Wednesday afternoon, with the NYMEX December West Texas Intermediate contract dropping by $2.08 to $75.32 per barrel. The January WTI contract fell $1.93 to $75.28 per barrel.
European Benchmark Brent Crude
Brent crude, the European benchmark, also witnessed significant losses. The January contract dipped by $2.04 to $79.57 per barrel, while February's prices declined by $1.92 to $79.39 per barrel.
Factors Influencing Oil Prices
Although the Energy Information Administration did not publish its weekly inventory and demand report on Wednesday, oil prices faced pressure due to inventory data released by the American Petroleum Institute on Tuesday. The data indicated an estimated build of nearly 12 million barrels in U.S. crude stocks for the week ending Friday. The API report also revealed a 400,000 barrel decline in U.S. gasoline inventories and a 1 million barrel increase in distillate stocks.
Concerns Regarding Demand
In addition to inventory data, concerns over demand have contributed to the downward trend. On Tuesday, the EIA reduced its forecast for U.S. gasoline consumption in 2023 by 0.5% and its 2024 forecast by 1.7%.
Reporting by Steve Cronin; Editing by Jeff Barber
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