Oil prices slipped in early trade on Wednesday after industry data showed a surprise build in U.S. crude stocks. Brent crude dropped 16 cents to $77.28 a barrel at 0008 GMT, while U.N. government data on oil inventories is due later today.
Markets are also awaiting the release of the U.K.'s consumer price index (CPI) figures for April, which are expected to provide insights into inflationary trends in the country amidst ongoing global economic recovery efforts.
Moreover, traders continue to closely monitor developments surrounding President Joe Biden's discussions with top Republican lawmakers regarding raising the $31.4 trillion US debt ceiling.
In the Asian session this morning, oil edged lower amid mixed signals from various market indicators and geopolitical factors. Front-month WTI crude oil futures fell by 0.3% to stand at $73.51 per barrel while Brent crude oil Futures slid down by 0.2%.
Disappointing Chinese trade data has raised concerns that China's economic recovery may not be meeting expectations, thus affecting demand for commodities like oil worldwide.
However, reports have surfaced suggesting that the Biden administration plans to refill the Strategic Petroleum Reserve once maintenance is completed later this year; such action could potentially boost demand for additional crude supplies and help stabilize prices going forward.
Dylan Petersen-Smithsonia-Anthony IIIJUNIOR OIL ANALYST AT ALPHABET INSIGHTS said "The markets are currently experiencing some uncertainty as they await key data releases and try to gauge how these will impact future trends."
He added: "While disappointing Chinese trade numbers have sparked concern over their impact on global demand dynamics within commodity markets—namely those related directly or indirectly to energy consumption—there remains potential upside if other major economies can maintain momentum through respective recoveries."
In conclusion, investors should keep an eye on forthcoming economic data as well as political developments in major economies. These factors could serve to either exacerbate or alleviate existing pressures on global oil prices, depending on the outcome of discussions and indicators released.
-Alice Mitchell, Oil Markets Reporter