OPEC + decision and US data hit the oil market

Crude oil prices fell to USD 90 per barrel WTI on Wednesday morning. It came after yesterday's OPEC + decision. Probably it contributed to a 4% cut during one session. Crude oil prices could also have been affected by EIA data on rising oil stocks and a decline in fuel demand.

Countries belonging to OPEC + decided at yesterday's meeting to increase the supply of crude oil by 100 thousand. barrels per day in September, but at the same time made it clear that it was probably the end of the increase in production.

Americans drive less than during the lockdown

OPEC + has signaled that processing capacity is already limited and that a group of major oil producers in the world, even if they really wanted to, cannot increase production indefinitely. Thus, the plan of US President Joe Biden, who had previously visited Saudi Arabia and encouraged a large increase in supply, failed.

What OPEC + will not do, the US will do. The EIA data shows that inventories oil in the United States unexpectedly increased by as much as 4,5 million barrels last week. The market expected a decline by 629. barrels. The reading could therefore be very surprising. What's more, the EIA report shows that Americans drive their cars less this summer than in the previous season, especially compared to the summer of 2020, when covid restrictions were still in force. If there is less car traffic in an open economy than in a closed economy, this may indicate that, in fact, US consumers are feeling very strongly about the increase in fuel prices in their wallets.

A chance for a drop in fuel prices at stations

As a result, a slight increase in supply with a noticeable decrease in demand could lead to a drop in oil prices, and it is possible that demand will not recover soon. Americans are likely to expect further interest rate hikes, increasing loan installments and interest on credit cards.

Belt-tightening Americans - this may be a ready recipe for further cooling of the US economy, but also for lower fuel prices at gas stations not only in the US, but also in other parts of the world.