Falling U.S. crude inventories ease market demand concerns Oil prices stabilize

According to a July 20 Bloomberg report, oil prices stabilized as U.S. crude stockpiles fell and the market's ongoing concerns about demand were removed.

West Texas Intermediate crude prices traded above $75 a barrel after falling 0.5 percent on Wednesday. Official data showed a decline in U.S. inventories across the country, with the biggest drop since October 2021 at Cushing, Oklahoma. However, demand for major refined products (gasoline, distillates and jet fuel) fell for the second week in a row, moderating the situation.

Following last week's plunge, the recent recovery of the U.S. dollar has exacerbated bearish sentiment for oil, with dollar-denominated commodities becoming more expensive for most buyers. Crude oil prices were narrowly mixed this week and are still down slightly year-to-date, having risen sharply since late June on signs that the market may finally be tightening.

Gains earlier in the week were reversed due to a stronger dollar, while the impact of the inventory report was limited, said Charu Chanana, a market strategist at Saxo Capital Markets Pte Ltd in Singapore.