Oil Prices Rise as Supply Concerns Douse Demand Optimism
Oil prices edged higher on Thursday as supply concerns over attacks on Russian oil assets clouded demand optimism after a sharp decline in US inventories.
International benchmark Brent crude was trading at $62.82 per barrel, up 0.2% from the previous close of $62.68. US benchmark West Texas Intermediate (WTI) also increased by about 0.3% to $59.11, compared to $58.93 in the prior session.
Gains were driven by reports that oil depots in Russia, one of the world’s major oil suppliers, had been targeted, stoking concerns that the country’s crude production and export capacity could be disrupted.
A stalemate in peace negotiations between Moscow and Kyiv also dampened expectations that Russian oil could return to global markets.
Ukrainian President Volodymyr Zelenskyy said in a video posted on social media on Wednesday that Ukraine’s interests must be taken into account to achieve an honorable peace.
He also referred to recent work on a US-backed peace plan to end the war, saying preparations were underway for new talks.
Noting that a US delegation discussed the plan with Russia in Moscow on Wednesday, Zelenskyy said Ukraine’s negotiating team would travel to the US again and that preparations were underway for the meeting.
Meanwhile, data showing a rise in US commercial crude oil inventories capped further price gains. US commercial crude oil inventories increased by 0.1% during the week ending Nov. 28, according to data released by the Energy Information Administration (EIA) late Wednesday.
Inventories rose by around 600,000 barrels to 427.5 million barrels, exceeding the market prediction of a 1.9 million-barrel decline.
Strategic petroleum reserves, which are excluded from commercial crude stocks, increased by 300,000 barrels, reaching 411.7 million barrels, the data revealed.
Over the same period, gasoline inventories rose by around 4.5 million barrels to 214.4 million barrels. The data weighed on prices by reinforcing perceptions of weak demand in the US, one of the world’s largest oil consumers.
US OIL INVENTORIES
US commercial crude oil inventories increased by 0.1% during the week ending Nov. 28, according to data released by the Energy Information Administration (EIA) late Wednesday.
Inventories rose by around 600,000 barrels to 427.5 million barrels, exceeding the market prediction of a 1.9 million-barrel decline.
Strategic petroleum reserves, which are excluded from commercial crude stocks, increased by 300,000 barrels, reaching 411.7 million barrels, the data revealed.
Over the same period, gasoline inventories rose by around 4.5 million barrels to 214.4 million barrels.
EIA data showed that US crude oil production increased by 1,000 barrels per day (bpd) to about 13.81 million bpd during the week ending Nov. 28.
US crude oil imports decreased by 456,000 bpd to approximately 5.98 million bpd, while exports rose by around 15,000 bpd to around 3.61 million bpd over the same period.
In the Short-Term Energy Outlook (STEO) released on Nov. 12, the EIA predicted that crude oil output in the country would reach an average of 13.59 million bpd in 2025.
