Oil prices retreat after supplies show to be adequate

Brent crude oil futures slid by 1.18% to US$73.48 per barrel at 7.05am GMT, lower than US$74.36 per barrel on Tuesday.

Oil prices calmed down on Wednesday after market watchers said that the global oil market remains adequately supplied thanks to spare output from the Organization of the Petroleum Exporting Countries (Opec), Russia, and also the United States (US).

Brent crude oil futures slid by 1.18% to US$73.48 per barrel at 7.05am GMT, lower than US$74.36 per barrel on Tuesday.

US West Texas Intermediate crude futures fell by 0.50% to US$65.85 per barrel, reversing from the price of US$66.18 per barrel a day ago.

Crude oil prices soared to the highest levels since November this week on concerns of a supply crunch after the US announced a further restriction on Iranian oil exports, demanding buyers of Iranian oil to stop their purchases by May 1 or face sanctions.

The announcement aims to block Iran from the US$50 billion annual oil revenues it relies heavily on.

Global oil markets ‘adequately supplied’

On Monday, the White House said it was working with top oil exporters Saudi Arabia and the United Arab Emirates to ensure that the market was ‘adequately supplied’.

On Tuesday, the International Energy Agency (IEA), a watchdog for oil-consuming countries commented in a statement that the oil markets are adequately supplied, and that global spare production capacity remains at ‘comfortable levels’.

According to IEA, the biggest new source of oil supply comes from the US, as total oil supplies from the country is expected to grow by 1.6 million barrels per day for this year.

The US has already increased in its crude oil production by more than two million barrels per day since early last year, pumping up a record of more than 12 million barrels per day at the start of this year.

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