Crude Oil Market Closes Bearish over Weak U.S Demand
Oil market closed bearish this week, pressured by signs of weakening demand in the US, Washington’s technical easing of sanctions on Lukoil’s overseas operations, and continued uncertainty surrounding the Russia-Ukraine peace efforts.
Brent crude traded at $62.99 per barrel, down 0.4% from last Friday’s close of $63.24. US benchmark West Texas Intermediate (WTI) was at $59.30 per barrel, falling around 0.2% compared with $59.43 last week.
The US Energy Information Administration (EIA) reported that commercial crude inventories rose by 600,000 barrels last week to 427.5 million barrels, defying expectations for a 1.9 million-barrel draw.
Strategic reserves climbed by 300,000 barrels to 411.7 million barrels, while gasoline inventories surged by 4.5 million barrels to 214.4 million barrels. US crude production inched up by 1,000 barrels per day (bpd) to 13.815 million bpd, reinforcing the perception that supply remains abundant even as demand softens.
The data collectively exerted strong downward pressure on prices, with traders increasingly pricing in a slower consumption outlook. Sentiment was further weighed down by Washington’s decision to temporarily allow Lukoil to continue operating its fuel stations outside Russia through April 29, 2026, easing concerns over potential supply disruptions.
The waiver, issued by Office of Foreign Assets Control (OFAC), softened parts of earlier sanctions imposed on Rosneft, Lukoil and their affiliates for failing to show sufficient commitment to Ukraine peace efforts.
Peace-related signals also contributed to broader risk unwinding.
Russian President Vladimir Putin told India Today that the war would end once Moscow’s pre-war objectives were achieved. Putin described his Dec. 2 meeting with US President Donald Trump’s envoys as “very useful” and noted that all items of the US peace plan had been discussed.
His remarks lowered the geopolitical risk premium in crude markets, adding to the week’s downward pressure.
Meanwhile, heightened instability in Yemen also bolstered supply concerns. UAE-backed Southern Transitional Council (STC) forces seized key areas, strategic towns and oilfields in the oil-rich Hadhramaut province, according to local reports.
Yemen’s Second Military Region confirmed that STC Special Forces had taken control of positions previously held by the “Tribal Alliance,” as well as oil company sites on the Hadhramaut plateau, after repelling an attack by rival forces.
Meanwhile, in Latin America, US President Donald Trump’s move to close US airspace over Venezuela, following earlier naval deployments near the country, raised the risk of tighter restrictions on Venezuelan crude flows.
Analysts say a full-scale conflict remains unlikely, though additional US pressure could threaten the country’s oil production and exports.
Expanded drone activity targeting energy infrastructure in both Russia and Ukraine further limited the downside, highlighting ongoing risks of supply chain disruptions.
While these bullish geopolitical elements offered pockets of support, weak US demand signals and the easing of sanctions on Lukoil dominated market sentiment, pushing crude prices lower on a weekly basis. Aradel Holdings: A Good Time to Anticipate Price Swing
