Oil Prices Surge as U.S. Crude Inventories Reduce

Oil Prices Surge as U.S. Crude Inventories Reduce

Oil prices edged higher on Thursday as US crude inventories fell more than expected, while diplomatic efforts to end the Russia-Ukraine war fuel volatility and raise concerns over a potential increase in global supply.

Brent crude was trading at $63.19 per barrel, up 0.06% from the previous close of $63.15. US benchmark West Texas Intermediate (WTI) also increased by about 0.08% to $59.33, compared to $59.28 in the prior session.

According to data from the US Energy Information Administration (EIA), commercial crude stocks fell by about 3.4 million barrels last week. Markets had expected a decrease of roughly 600,000 barrels.

The drop in inventories pointed to increased refinery activity and stronger export demand, while the build in gasoline stocks raised questions about domestic consumption.

Meanwhile, diplomatic efforts aimed at ending the Russia-Ukraine war also contributed to price volatility. Expectations that a potential end to the conflict could lead to the lifting of sanctions on Russian oil, bringing additional supply to the market, continue to exert downward pressure on prices.

US Oil Production

EIA data showed that US crude oil production decreased by 28,000 barrels per day (bpd) to about 13.83 million bpd during the week ending Dec. 14.

US crude oil imports increased by 729,000 bpd to approximately 5.95 million bpd, while exports rose by around 1.34 million bpd to around 4.16 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. GTCO Slides Amidst Multiple Block Transactions