Oil Prices Rise for Second Day as U.S. Stockpiles
Oil rose for a second day after an industry report showed another drop in U.S. crude inventories.
Brent traded above $77 a barrel, after rising 1% on Tuesday, while West Texas Intermediate neared $75. U.S. stockpiles fell by 4 million barrels last week, the American Petroleum Institute reported, which would be the seventh straight decline and the longest decline in three years if confirmed by government data later Wednesday.
Oil has had a strong start to 2025, with prices breaking through a month-long range, but many analysts continue to warn of a supply glut this year and technical indicators suggest the rally may have gone too far. The market is also bracing for a second presidential term for Donald Trump. Oil futures rose on Tuesday — reversing earlier losses — as cold weather in the U.S. boosted demand for heating fuel, raising the risk of freezing in production areas, while northern Europe also faced snow and ice.
“The cold front in the U.S. and Europe is pushing crude prices higher, with some support from concerns over the loss of Iranian barrels if the Trump administration tightens sanctions,” said Vandana Hari, founder of Vanda Insights in Singapore. “Nevertheless, crude looks overbought. Crude may see some profit-taking, although it may need to be reminded of the global economic headwinds.” In a sign of tightening supplies, Russian data showed its oil output fell below its OPEC+ output target last month, after seaborne exports fell to the lowest since August 2023.
Meanwhile, ports in eastern China’s Shandong province, a major destination for Iranian crude, were urged to prevent tankers subject to U.S. sanctions from docking at their berths. Stocks at Cushing, the delivery point for WTI, fell by 3.1 million barrels, API reported, according to a document seen by Bloomberg. That would bring inventories to their lowest level since 2014 if confirmed by government figures.
Source: Bloomberg
