Oil Gains on Possibility of Tighter Sanctions on Russian Crude
Oil rose on the possibility of tighter sanctions on Russian crude, but pared gains after a government report showed increases in US gasoline and distillate stockpiles.
West Texas Intermediate was up about 1% to top $69 a barrel, but retreated from its highs of the day after government data released Wednesday showed a 5.09 million-barrel gain in gasoline inventories and a 3.24 million-barrel increase in distillate stockpiles. Brent edged higher above $72.
The reports are sapping the bullishness sparked by a report that the Biden administration is considering tougher sanctions on Russia’s oil trade, which could tighten the market and drive up prices before President-elect Donald Trump takes office. Details of the possible measures were still being worked out, according to people familiar with the matter.
Meanwhile, OPEC made its deepest cut yet to global demand growth forecasts for this year, slashing projections by 27% since July. The Organization of Petroleum Exporting Countries lowered projections for consumption growth in 2024 by 210,000 barrels a day. As the cartel belatedly recognizes the deteriorating market picture, the US Energy Information reversed its prediction for a surplus and now calls for a small deficit next year.
“The latest EIA report has caught some by surprise with a forecast of a mostly balanced oil market in 2025, versus some calling for a strongly oversupplied market,” UBS Group AG commodity analyst Giovanni Staunovo said.
Crude has traded in a roughly $6 range since mid-October, caught between competing bullish and bearish factors, including Middle East tensions and expectations for a global glut.
WTI for January delivery gained 1.1% to $69.32 a barrel at 10:52 a.m. in New York.
Brent for February settlement rose 0.8% to $72.75 a barrel.
Source : Bloomberg
