Oil prices fall despite larger-than-expected draw in US crude stocks

Oil prices fell Wednesday, as China-led optimism from a day earlier cooled, though a bigger-than-expected draw in U,S. crude stockpiles kept losses in check. 

At 1:47 p.m. ET (17:47 GMT), Brent oil futures fell 2.4% to $72.69 a barrel, while West Texas Intermediate crude futures dropped 2.85% to $69.50 a barrel.  US inventories fall more than expected

Data from the Energy Information Administration showed U.S. oil inventories fell by 4.5 million barrels (mb) in the week to September 20, much more than expectations for a draw of 1.1 mb. 

U.S. inventories were seen remaining tight as supply disruptions due to storms in the Gulf of Mexico offset slower fuel demand after the end of the travel-heavy summer season.

Hurricane Helene is set to make its way through the Gulf in the coming days - the second major storm to hit the area in a month.  Boost after China stimulus wanes 

The People’s Bank of China unveiled a slew of stimulus measures on Tuesday, including increased liquidity measures and looser restrictions on the property market. 

The move pushed up hopes that economic growth in the world’s largest oil importer will improve, sparking a 1.7% rally in oil during the session.

But analysts argued that more measures were needed from Beijing to shore up sluggish growth. China has rolled out monetary stimulus repeatedly over the past three years, to little effect.

“Yesterday’s monetary stimulus package is far from being sufficient on its own. In our view, an aggressive fiscal policy is required,” analysts at ANZ wrote in a note. OPEC offers bullish outlook

OPEC raised its forecasts for world oil demand for the medium and long term in an annual outlook, according to a report released Tuesday.

"Future energy demand is found in the developing world due to increasing populations, middle class and urbanization," said OPEC Secretary General Haitham Al Ghais during the report's launch in Brazil.

OPEC expects global oil consumption to increase to 112.3m bbls/day in 2029 and further to 120.1m bbls/day by 2050 compared to 102.2m bbls/d in 2023.

"The demand growth slows down post-2030, however the organisation does not expect the peak of oil demand in the foreseeable future even as investments in alternate fuels have increased," said analysts at ING, in a note. "On the other hand, OPEC sees US crude oil supply peaking by 2030 and declining gradually later on as shale oil production falls."

(Peter Nurse, Ambar Warrick contributed to this article.)

Source: Investing.com