Oil Prices Pullback After Hitting 2014 Highs
Crude oil prices pull back on Thursday after hitting record highs on Wednesday that has not been seen since 2014, helped by supply disruption in Libya, Iraq-Turkey explosion among other unrest.
International benchmark Brent crude hit as high as $89.17 on Wednesday, pushed by short-term, global supply disruptions. On Thursday, Brent was trading at $88.30 per barrel after a 0.15% drop from the previous session at $88.44 a barrel.
American benchmark West Texas Intermediate (WTI) was at $85.92 per barrel at the same time for a 1.19% decrease after trade in the previous session ended at $86.96 a barrel.
Oil prices retreated after short-term supply disruptions were resolved; namely the resumption of the 1,876 kilometre-long key pipeline that carries crude oil from northern Iraq for export from Turkiye’s southern port of Ceyhan.
The pipeline had been knocked offline by an explosion late on Tuesday for ‘unknown’ reasons. However, it reopened after ‘all necessary measures were taken and the fire was extinguished, Turkiye’s state pipeline operator BOTAS said on Wednesday.
Further oil supply hazards came from in the Middle East when Yemen’s Houthi group attacked oil facilities in the United Arab Emirates (UAE) earlier in the week and threatened oil supply in the region.
Another threat for supply chains arose when Russia, Ukraine and NATO stepped up military exercises from intensified tensions over recent weeks, with Kyiv openly accusing Moscow of planning an invasion.
Meanwhile, producers from the Organization of Petroleum Exporting Countries (OPEC) are straining to meet their monthly quotas under the OPEC+ deal with Russia and its allies to add 400,000 barrels per day.
The rising number of daily omicron cases in major economies is also limiting upward price movements by raising the possible need to implement stricter measures.
Elsewhere, US crude oil stocks, including those in the Strategic Petroleum Reserve, fell by 800,000 barrels in the week ended Jan. 14 following a decrease of 4.9 million barrels in the previous week.
Excluding inventories in the SPR, commercial crude oil stocks rose by 500,000 barrels after a 4.6 million barrel decline in the previous week, compared with a 1.8 million barrel decrease expected in a survey compiled by Bloomberg.
Stocks in the SPR fell by 1.3 million in the week after falling by 0.3 million in the previous week. Overall crude oil stocks were down 0.1% from the previous week and fell by about 11% from a year earlier.
Crude oil inventories are about 8% below the five-year average for this time of the year.
Gasoline stocks rose by 5.9 million barrels, much larger than the 2.6 million barrel increase expected. Gasoline stocks were up 2.4% from the previous week and up 0.6% from a year earlier. Distillate stocks fell by 1.4 million barrels in the current week, compared with an expected decrease of 1.3 million barrels.
Distillate stocks were down 1.1% from the previous week and were 21.8% lower than in the same week last year. Refineries operated at 88.1% of their capacity, down slightly from 88.4% the week before. # Oil Prices Pullback After Hitting 2014 Highs
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