• gains being capped by the unexpected rise in US crude inventories
• US dollar volatility may have fueled forecasts calling for supply deficits
• last week’s rise in U.S. inventories came as production in the Gulf returned close to levels reached before Hurricane Ida struck
• a power crisis and housing market concerns in China are pressuring sentiment and weighing on oil demand

U.S. West Texas Intermediate crude oil futures are trading nearly flat on Friday, edging lower shortly after the New York opening as investors attempt to close out a choppy week with a marginal gain says an article on the Oil price.

Supply deficits

After surging into a multi-month high at the start of the week on stronger demand expectations, the market is struggling with traders booking profits and moving to the sidelines as higher U.S. crude oil inventories and a strong U.S. Dollar offset recent forecasts calling for supply deficits.

Production and oil demand

Last week’s rise in U.S. inventories came as production in the Gulf returned close to levels reached before Hurricane Ida struck about a month ago. Meanwhile, a power crisis and housing market concerns in China, the world’s biggest crude importer and its second-largest consumer behind the United States, is pressuring sentiment and weighing on oil demand.

Gains capped by an unexpected rise in inventories

The API on Tuesday reported a surprise build in crude oil inventories of 4.127 million barrels for the week ending September 24. Analyst expectations were for a loss of 2.333 million barrels for the week. The API also reported a build in gasoline inventories of 3.555 million barrels for the same week. Distillate stocks saw an increase in inventories this week of 2.483 million.