Be Careful in the Oil Market, You Need to Know This!
Oil prices moved steadily in Wednesday morning trading, with West Texas Intermediate (WTI) trading just below US$61 per barrel. Prices had previously strengthened by more than 1% on Tuesday, while Brent closed near US$65 per barrel. Market participants were weighing two main factors: a reported increase in US crude oil inventories and concerns about the impact of sanctions on Russia.
A report from the American Petroleum Institute (API) showed that US crude oil inventories rose by around 4.4 million barrels, accompanied by increases in stocks of other oil products. If this figure is confirmed by official government data, total US oil stocks would reach their highest level in more than five months. Stock increases like this usually signal pressure on prices because they indicate abundant supply.
At the same time, the market is also focused on the imminent implementation of US sanctions against Russian producers Rosneft and Lukoil. These sanctions are part of an effort to pressure Moscow regarding the war in Ukraine. Ahead of the sanctions, several major buyers in Asia have already halted some purchases of Russian oil, while the diesel market in Europe has begun to strengthen due to supply concerns.
Overall, oil prices have tended to weaken this year, including three consecutive months of declines through October. A major concern is global supply, which is expected to exceed demand. The International Energy Agency (IEA) even projects a record surplus next year, driven by increased production from OPEC+ countries and producers outside the cartel.
Another sign of abundant supply is the volume of oil transported by tankers, which has reached a new record. Around 1.4 billion barrels of oil are currently at sea, either en route to their destinations or stored in floating storage. At 8:17 a.m. Singapore time, the December WTI contract fell slightly by 0.2% to US$60.62 per barrel, the January contract was around US$60.51, while the January Brent contract closed up 1.1% at US$64.89 per barrel. (asd)
Source: Bloomberg.com
