RIYADH: Oil prices fell on Wednesday, ending a three-day rally, as an unexpected rise in US oil inventories sparked demand concerns, and investors awaited inflation data to gauge the next rate decision in the top oil-consuming nation.
Brent crude LCOc1 dropped $1.32, or 1.70 percent, to $76.12 a barrel at 11:45 a.m. Saudi time. US West Texas Intermediate crude fell $1.22, or 1.66 percent, to $72.49.
In a possible sign of weakening demand, US crude inventories rose by about 3.6 million barrels in the week ended May 5, while gasoline stockpiles rose by 399,000 barrels, the American Petroleum Institute reported on Tuesday.
The surprising US inventory buildup, coupled with lower crude imports and softer export growth in China in April, exacerbated worries about global oil demand.
EIA expects US oil output to rise 5% in 2023
The Energy Information Administration on Tuesday forecast that US crude production will increase by about 5 percent in 2023, while fuel demand will rise 1 percent.
Crude production will grow 5.1 percent to 12.53 million barrels per day in 2023 and 1.3 percent to 12.69 million bpd in 2024, the EIA said in its short-term energy outlook.
The EIA added that total petroleum consumption would rise nearly 1 percent to 20.5 million bpd in 2023 and 1.4 percent to 20.8 million bpd in 2024.
Occidental Petroleum’s quarterly earnings fall 48%
US oil and gas producer Occidental Petroleum Corp. on Tuesday reported a 48 percent decline in first-quarter earnings that fell well short of analyst estimates as global economic growth concerns led to a decline in oil prices.
Global energy prices in the quarter pulled back from last year’s peaks triggered by Russia’s invasion of Ukraine. Occidental’s crude oil sold for 19 percent less than the year-ago quarter, averaging $74.22 per barrel.
Earnings declined despite a boost in first-quarter oil and gas daily output to 1.22 million barrels from 1.08 million a year earlier, spurred by higher production from its Permian operations.
The company, in which billionaire investor Warren Buffett’s Berkshire Hathaway Inc. owns a 24 percent stake, reported adjusted income dropped 48 percent from the prior year to $1.1 billion as it accelerated investments and shareholder returns.
Adjusted earnings of $1.09 per share for the quarter fell far short of analysts’ $1.24 per share estimate compiled by Refinitiv.
Occidental almost doubled capital spending in the quarter from a year earlier to $1.5 billion, and cash flow from operations before working capital fell 24 percent to $3.2 billion.
UAE’s Jaber urges methane emissions phase out by 2030
Sultan Al-Jaber, president designate of the upcoming UN climate change conference set to be held in Dubai, said on Wednesday the oil and gas industry should phase out its methane emissions by 2030 and that investment in technology was needed to develop carbon alternatives.
Jaber was speaking in Abu Dhabi at the inaugural UAE Climate Tech conference.
Jaber also renewed calls for a tripling of renewable energy capacity to 11,000 gigawatts by 2030 and doubling that again by 2040 but added that renewable energy was not the only answer to climate change.
“If we are serious about curbing industrial emissions, we need to get serious about carbon capture technologies,” Jaber told a crowd of more than 1,000 participants drawn from technology companies, major industries, finance and government.
(With input from Reuters)
