Oil prices rise amid falling crude inventories

Oil prices continued their rise on Wednesday morning in Asia as inventories in the US decreased, but prices still remained below $30.

The American Petroleum Institute (API) reported yesterday a decrease of 421,000 barrels of crude oil in US inventories for the week ending March 13.

This is a sharp fall from the previous week, when the API reported an increase of 6.407 million barrels and the US Energy Information Administration reported a rise of 7.7 million barrels.

US Crude Oil WTI Futures rose 0.26% to $27.4 by 10:25 PM ET (02:25 AM GMT) on the back of the report. International Brent Oil Futures gained 0.80% to $28.95.

Gains were limited however as fears of a perfect storm hitting oil prices continued to mount.

The COVID-19 novel coronavirus epidemic continue to spread and the number of countries imposing quarantines continue to grow. At the same time, both Saudi Arabia and Russia have boosted production as part of an ongoing price war.

The ongoing price war between the two production giants prompted Iraqi Oil Minister Thamer al-Ghadhban to request <a href=’https://staging.theenergyyear.com/companies-institutions/opec/’>OPEC hold an urgent meeting of the Joint Ministerial Monitoring Committee secretariat in an attempt to rebalance the markets.

“These are dramatic and unheard-of disruptions,” Pavel Molchanov, an energy research analyst at Raymond James & Associates, told Bloomberg. “Lockdowns around the world alone would be enough to trigger a bear market for oil. Add in the collapse of OPEC+, those two create an unbelievably toxic combination. This crisis is shaping up to be the worst shock to global demand in modern history.”