Oil Prices Rise amidst Lingering Demand, Supply Risks
Oil prices rose on Thursday during early trading hours in the global commodities market amidst lingering demand and supply risks. The international oil benchmark of Brent crude increased to $75.31 per barrel, while the US benchmark West Texas Intermediate also rose to $71.29 per barrel.
Data from the American Petroleum Institute (API) released late on Tuesday showed an increase of 1.64 million barrels in US commercial crude oil inventories, more than market expectations of a 700,000 barrel rise.
The reserve build reflected market perceptions of falling domestic demand, supporting downward price movements. Having sold off more than 1.4% yesterday, Brent bounced back this morning and edged towards $76.
The market continues to be caught between supply risks related to ongoing Middle East tension and lingering demand concerns, ING commodities strategists said in a note, adding that the outlook for a comfortable 2025 oil balance will also be playing a role in price action.
The EIA’s weekly inventory report was fairly bearish. US commercial crude oil inventories increased by 5.47m barrels over the last week, well above the 1.6 million barrel increase the API reported the previous day.
According to ING, This stronger-than-expected build occurred despite refiners increasing their utilisation rates by 1.8 percentage point which led to crude inputs growing by 329,000 b/d over the week.
Stronger crude oil imports increased by 902,000 b/d and contributed to the inventory build.
On the product side, gasoline inventories increased by 878k barrels, while distillate stocks fell by 1.14 million barrels. On the demand side, while apparent gasoline demand was stronger over the week, the total implied demand for refined products fell by 446,000 b/d week on week.
In the Middle East, supply risks remain elevated. Israel’s increased attacks in the Middle East continue to influence the oil market.
On Tuesday, Israeli military confirmed that ‘Hisham Safieddine, Head of the Hezbollah Executive Council, and Ali Hussein Hazima, Commander of Hezbollah’s Intelligence Headquarters, were eliminated by the IDF (army), along with additional Hezbollah commanders,’ via a statement. #Oil Prices Rise amidst Lingering Demand, Supply Risks NAFDAC Destroys Fake Products Worth N43bn in Ibadan
