The price of oil decreased at the beginning of sales on Wednesday. That happened after the industrial data showed that the stock of the United States raw oil was unexpectedly increasing last week. It was especially after the cold weather.
The cold weather that happened in the south part of the country disturbs the demand from the factory that had to be closed. That situation made the pipe was frozen and the electrical distribution was not going so well. The increased stock is not a good thing for now.
The raw oil inventory was up for one million barrels in a week until 19 of February 2021. Furthermore, the API or American Petroleum Institute reported that thing on Tuesday. They compared it to the withdrawal expectation of 5.2 million barrels.
A Data from API Is Highlighted
In this kind of situation, many market participants and analysts will highlight any kinds of data related to the commodity. One of them is from API. Their data showed that the production of raw oil material decreases by 2.2 million barrels per day.
Meanwhile, the WTI crude oil also declines by 55 cents or 0.9%. Based on the calculation, that commodity becomes $ 61.12 per barrel. That happened after it was declined by 3 cents on Tuesday. It was evident that the movement is still volatile.
Elsewhere, the Brent raw oil also declines by 38 cents or 0.6%. It becomes $ 64.99 per barrel. That achievement deleted the increase of 13 cents which was happened on Tuesday. That is why; the investors will wait for any confirmation from a related institution.
That is actually from the U.S. Energy Information Administration. They stated on Wednesday that the crude oil inventory increased last week. That situation was still continued to happen although the production of shale oil was hit by the cold weather which never happened before.
What Kinds of Solutions Needed?
The question now is that how quickly that the stock of American oil will be recovered? It is important to answer to calm down the market right now. However, it seems that the inventory will be recovered faster than the factory.
Meanwhile, the stock is able to exceed the request in several weeks in the future. That could give the negative weight in the market. This analyst shared by an expert. That decline is seen as a break that follows the more than 26% rally to its highest level.
For your information, that is the highest level for 13 months. That happened on Brent and WTI since the beginning of the year. The prices have soared due to supply disruptions from the US. The inventory discipline from OPEC+ also becomes the cause.
It is known that they decided to add 1 million barrels cut per day by Saudi Arabian. At the same time, the stimulus spending to support growth, investors who change to commodity, and hope of vaccination support the price of oil in the market.
US Dollar Slips Against Pound
The US Dollar was slipped to its lowest level in three years to the British Pound and also weakened to several currencies. That happened on Wednesday because investors show a positive response to the global economic recovery.
That situation increases the risk assets. The New Zealand dollar becomes a focus before a meeting from the Central Bank which could send the kiwi higher. It is if the policymaker makes a positive comment about the local economy.
Jerome Powel made a strong statement on Tuesday that the interest rate will still in a low level. Furthermore, The Fed will continue to purchase obligations for supporting the American economy. The market participants thought that it is the long-term negative factor for the dollar.
