Oil prices experienced a third consecutive day of gains, driven by the latest data on fuel inventories in the United States and apprehensions about possible disruptions in Russian supply channels.
On Thursday, Brent futures closed at $76.48 per barrel, marking an increase of 44 cents or 0.58%. Simultaneously, the U.S. West Texas Intermediate (WTI) crude for March delivery rose by 32 cents, or 0.44%, reaching $72.57. The April contract, traded more extensively, went up by 0.35%, settling at $72.50 per barrel.
This uptick in oil prices comes amidst reports of a slight rise in U.S. crude oil stockpiles, surpassing expectations. However, fuel inventories saw a decline, attributed to reduced processing during seasonal refinery maintenance, as reported by the Energy Information Administration. UBS analyst Giovanni Staunovo noted that while crude stockpiles increased more than anticipated, the drawdowns in gasoline and distillate kept overall inventories stable.
The market reacted positively to this news, causing crude futures to edge higher. Investors were also closely monitoring developments in Russia, where renewed hostilities have impacted gas infrastructure and production facilities in Ukraine according to Ukraine’s Energy Minister, German Galushchenko. These tensions have further strained the Caspian Pipeline, a key route for Kazakhstan’s oil exports, experiencing a significant reduction due to attacks.
Meanwhile, the prospect of Iraq resuming oil flows from its Kurdistan region played a moderating role in the market. Although Turkey, which oversees the port of Ceyhan handling Kurdish oil, has yet to receive confirmation on resumption, the potential for an additional 300,000 barrels per day remains a balancing factor according to ING’s analysts.
There’s also a broader concern about economic headwinds stemming from U.S. policy changes, notably tariffs that might elevate consumer goods costs, potentially dampening global economic growth and oil demand. SEB’s chief commodities analyst, Bjarne Schieldrop, highlights the ramifications of such policies on the global economic outlook, especially with proposed tariffs on U.S. car imports.
The current landscape of the oil market is shaped by complex interplays between inventory data, geopolitical tensions, and economic policies. As these dynamics evolve, the market remains sensitive to shifts that could impact supply and demand balances.
