(RTTNews) – After a significant drop in the previous session, crude oil prices have rebounded during trading on Wednesday.
Crude oil for May delivery has risen by $0.51, or 0.7 percent, to $71.71 per barrel, following a decrease of $0.28, or 0.4 percent, to $71.20 per barrel on Tuesday. This upward movement marks a new five-week high for crude oil prices.
This increase in crude oil prices occurred despite the release of a report from the Energy Information Administration (EIA), which unexpectedly indicated a substantial rise in U.S. crude oil inventories for the week ending March 28th.
The EIA reported that crude oil inventories jumped by 6.2 million barrels last week, recovering from a decline of 3.3 million barrels in the prior week. Economists had anticipated a decrease of 2.0 million barrels in inventories.
Nevertheless, U.S. crude oil inventories currently stand at 439.8 million barrels, approximately 4 percent below the five-year average for this time of year, according to the report.
Additionally, the EIA noted that gasoline inventories fell by 1.6 million barrels last week but remain 2 percent above the five-year average for this period.
Traders appeared to overlook worries that President Donald Trump’s reciprocal tariffs on U.S. trading partners could diminish fuel demand.
Trump is set to announce the new tariffs during a Rose Garden event later today, with White House press secretary Karoline Leavitt indicating that the new levies will take effect immediately.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
Crude oil prices experienced a notable rebound on Wednesday, following a sharp decline in the previous session. Crude oil for May delivery rose by $0.51, or 0.7%, reaching $71.71 a barrel, after closing at $71.20 the day before, marking the highest price in five weeks.
This price increase occurred despite a report from the Energy Information Administration (EIA) revealing an unexpected surge in U.S. crude oil inventories for the week ending March 28. According to the EIA, inventories rose by 6.2 million barrels, contrasting with economists’ expectations of a decrease of 2.0 million barrels and following a decrease of 3.3 million barrels in the previous week. Despite this increase, U.S. crude oil inventories of 439.8 million barrels remain approximately 4% lower than the five-year average for this time of year.
The EIA’s report also indicated a decline in gasoline inventories, which fell by 1.6 million barrels; however, gasoline stocks remain 2% above the five-year average for the same period. Traders appeared to overlook the potential implications of President Donald Trump’s new reciprocal tariffs on trade partners, which could affect fuel demand. These tariffs were anticipated to be announced during a Rose Garden event, with White House Press Secretary Karoline Leavitt indicating that they would be “effective immediately.”
Overall, the interplay of increased crude oil prices, rising inventories, and the economic implications of new tariffs create a complex landscape for markets. The resilience of crude oil prices, despite negative inventory news and potential trade disruptions, reflects the ongoing volatility and factors influencing energy markets. The market’s reactions underscore a broader sentiment that can often detach from fundamental supply-demand dynamics, at least temporarily, as traders navigate both immediate data releases and future economic indicators.
Moreover, while the crude oil increase signals confidence among traders regarding future demand, the unexpected rise in inventory poses questions about the short-term supply landscape. The EIA’s data suggests that while there was a significant week-to-week fluctuation in crude oil inventories, the overall trend remains below historical averages, pointing to a cautious optimism regarding the balance between supply and demand in the long term.
In summary, the rise in crude oil prices against the backdrop of increasing inventories aligns with trader sentiment as they assess the impact of tariffs and global economic factors. This situation highlights the intricate relationships influencing the energy market, where immediate data points and broader economic policies can interact in unexpected ways, shaping trader behavior and market dynamics.
