Oil Prices Decline over Weak U.S. Demand Expectation
Amidst uncertainties in the global commodity market, prices of crude oil eased due to a weak U.S. demand outlook after data showed a surge in inventories. Brent crude traded slightly lower on Thursday , supported by easing geopolitical tensions, and signs of rising oil inventories in the U.S.
Brent crude was trading at $63.85 per barrel, down 0.6% from the previous close of $64.23. US benchmark West Texas Intermediate (WTI) also decreased by 0.5% to $59.77, compared to $60.10 in the prior session.
The modest pullback in prices came as geopolitical risk premiums faded, reducing fears of near-term supply disruptions. Comments from US President Donald Trump suggesting that executions linked to protests in Iran had been halted helped ease concerns that Washington could move toward direct military action or tougher sanctions against Tehran in the near term.
The remarks tempered fears that tensions involving Iran could disrupt oil production or key shipping routes such as the Strait of Hormuz. Trump had previously warned that the US would respond harshly if protesters were executed, while noting that Washington has multiple tools, beyond military action, to support demonstrators, including economic measures.
Oil prices also faced pressure from more conciliatory signals surrounding US-Venezuela relations. Speaking at a signing ceremony at the White House, Trump said the US was “working well” with Venezuela’s interim leadership, later adding on social media that discussions with Delcy Rodriguez covered oil, mining, trade and national security.
On the demand side, unexpectedly strong increases in US crude and gasoline inventories added to downward pressure by fueling concerns over consumption in the world’s largest oil consumer.
US commercial crude oil inventories increased by 0.8% during the week ending Jan. 9, according to data released by the Energy Information Administration (EIA) late Wednesday.
Inventories rose by around 3.4 million barrels to 422.4 million barrels, defying the market prediction of a 1.7 million-barrel decline.
Strategic petroleum reserves, which are excluded from commercial crude stocks, increased by 200,000 barrels, reaching 413.7 million barrels, the data revealed.
Over the same period, gasoline inventories rose by around 9 million barrels to 251 million barrels.
EIA data showed that US crude oil production decreased by 58,000 barrels per day (bpd) to about 13.75 million bpd during the week ending Jan. 9.
US crude oil imports rose by 752,000 bpd to approximately 7.09 million bpd, and exports increased by around 43,000 bpd to around 4.3 million bpd over the same period.
In the Short-Term Energy Outlook (STEO) released on Jan. 14, the EIA predicted that crude oil output in the country would reach an average of 13.59 million bpd in 2026. Seplat Energy Powers the Market into the Green
