Jakarta, CNBC Indonesia – World crude oil prices are getting lower, approaching the $70 a barrel level. This level is the lowest in nearly a year. The cause is concern that the global economic slowdown will reduce fuel demand. Despite the closure of the Canadian-US crude oil pipeline.
During trading on Thursday (8/12/2022) the price of Brent crude oil was recorded at $76.15 a barrel, down 1.3% from its previous position. Meanwhile, the price of light sweet or West Texas Intermediate (WTI) oil fell 0.8% to $71.46 a barrel.
TC Energy announced the closure of the 622,000 barrels per day Keystone pipeline, which is the primary route for shipments of Canadian heavy crude from Alberta to the US Midwest and Gulf Coast.
Oil prices rose briefly after the company announced its shutdown, but fell as analysts noted that the US Gulf likely had enough inventories to handle a near-term pipeline shutdown.
Some analysts also said that portions of the line destined for Midwest refineries could restart soon. TC Energy has not announced when it will reopen the pipeline.
“I tend to think, any moment here, you’ll see headlines saying Keystone will be back sooner rather than later,” said Bob Yawger, director of energy futures at Mizuho. in New York.
Energy markets weighed down by fears of an economic slowdown, weakening fuel demand amid prospects for higher US interest rates, with the Federal Reserve expected to raise interest rates by 50 basis points next week.
As U.S. crude oil inventories fell last week, gasoline and distillate inventories rose, adding to concerns about reduced demand.
U.S. distillate inventories rose 6.2 million barrels, according to the Energy Information Administration, far exceeding forecasts for a 2.2 million barrel increase. Gasoline inventories rose 5.3 million barrels versus expectations for a 2.7 million barrel increase.
The increase in fuel inventories outpaced the drawdown of 5.2 million barrels of crude inventories. The American Petroleum Institute reported a crude inventory draw of about 6.4 million barrels, according to market sources.
CNBC INDONESIA RESEARCH TEAM
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