Oil prices further decline on unexpected rise in US stocks

Oil prices on Jan. 21 afternoon continue the morning decline amid data from the American Petroleum Institute (API) on an unexpected increase in US crude stocks, according to trading data, Report informs citing Prime agency.

As of 14:03 (Baku time), the price of March futures for North Sea Brent crude oil blend decreased by 0.82 percent - to $55.62 per barrel, March futures for WTI oil fell 0.81 percent, to $52.88 a barrel.

On Jan. 21, oil prices fell after the API data, according to which US oil stocks rose by 2.562 million barrels last week, while analysts expected a decline of 0.3 million barrels. Official data from the US Department of Energy will be released on Jan. 22. Analysts predict that the department will report a decrease in reserves by 1.167 million barrels.

‘US stocks have been declining over the past five weeks, and this was one of the key factors that kept prices high. If the Energy Department also confirms that oil inventories have risen, we may see further price adjustment,’ Head of Commodity Research at Kotak Securities Ravindra Rao told Reuters.

At the same time, the analyst noted that, on the other hand, oil is supported by a weak dollar and the prospect of a larger stimulus for the US economy. Joe Biden, who officially took office as President of the US on Jan. 20, previously proposed a $1.9 trillion stimulus package. The project was supported by the leaders of the Democrats in the Congress.