Oil Down Slightly with Focus on US Stockpiles, Supply Uncertainty
Oil fell slightly as an industry report marked another build in US crude stockpiles, as uncertainty over global supplies persists.
Brent crude fell below $76 a barrel after three straight days of gains, while West Texas Intermediate was around $72. The industry-funded American Petroleum Institute reported a 3.3 million-barrel increase in US commercial inventories last week, which would be the fourth straight week of increases if confirmed by official data later on Thursday.
Crude has risen this week on concerns about tighter supplies, as OPEC+ looks set to push back on production increases, exports from Kazakhstan are cut by a Ukrainian drone attack, and the Group of Seven nations consider tighter price curbs on Russian oil. However, trading has calmed after a tumultuous start to the year, with measures of implied volatility declining as markets grow increasingly numb to the raft of changes US President Donald Trump wants to implement.
Exports from Iraq’s semi-autonomous Kurdistan could resume this week, although Turkey said it had not received notification of the resumption of flows to the energy hub of Ceyhan. The pipeline from Kurdistan runs through Turkey so that oil can be shipped.
Meanwhile, Trump called his Ukrainian counterpart Volodymyr Zelenskiy a dictator, adding to concerns that a deal to end a three-year war with Russia will be reached without Kyiv’s involvement. Any peace deal could affect the status of Russian oil barrels that are currently under sanctions. “There’s still a lot of uncertainty in the oil market, with no clear direction at the moment” given all the uncertainty surrounding supply and Trump’s policy stance, said Sean Lim, an analyst at RHB Investment Bank Bhd in Kuala Lumpur. The bank expects Brent prices to average $75 a barrel this year.
Source: Bloomberg
