Crude Oil Prices Dip Despite Trade Worries as US Inventory Build Takes Center Stage

2 min read

Oil prices edged lower on Thursday, seemingly poised to break a three-day winning streak, as concerns about slowing global demand overshadowed anxieties regarding recent trade disruptions. While tensions in the Red Sea due to Houthi attacks initially buoyed prices, a surprise rise in US crude stockpiles and record domestic production proved more influential.

Earlier optimism stemmed from investor anxieties about possible trade disruptions after major shipping companies opted to avoid the Red Sea route. However, as analyst Tsuyoshi Ueno of NLI Research Institute noted, the impact on oil flow is expected to be limited unless it spills over into the critical Strait of Hormuz.

Crude Oil Prices Dip Despite Trade Worries as US Inventory Build Takes Center Stage

Adding downward pressure were the latest reports from the US Energy Information Administration (EIA). US crude inventories unexpectedly jumped by 2.9 million barrels, exceeding market expectations of a 2.3 million barrel decrease. Additionally, US oil production reached a new high of 13.3 million barrels per day, surpassing the previous record of 13.2 million barrels.

These factors outweighed the earlier concerns, causing West Texas Intermediate (WTI) crude oil futures for February delivery to inch down 0.18% to $74.09 per barrel. Similarly, Brent oil futures for February delivery dipped 0.08% to $79.64 per barrel.

While trade tensions remain a potential wildcard, the focus has shifted to the dynamics of global oil supply and demand. The unexpected inventory build and record US production suggest a potential for increased supply, which could further dampen oil prices in the near term.

More From Author

+ There are no comments

Add yours