Crude Oil Prices Increase Amidst Lingering Demand And Supply Risks

Oil prices climbed during early trading hours on Thursday in the global commodities market, despite persistent demand and supply concerns. Brent crude, the international oil standard, surged to $75.31 per barrel, while West Texas Intermediate, the US benchmark, gained to $71.29 per barrel.

The American Petroleum Institute (API) issued data late Tuesday showing a 1.64 million barrel increase in US commercial crude oil stockpiles, above market estimates of a 700,000 barrel rise.

The reserve build matched market estimates of declining domestic demand, which aided downward price movements. Brent rebounded this morning, approaching $76 after losing more than 1.4% of its value yesterday.

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.