Crude oil prices held steady today following a report from the U.S. Energy Information Administration (EIA) that showed a modest decline in inventories. For the week ending October 25, inventories dropped by 500,000 barrels.
As of this writing, Brent crude was priced at $72.25 per barrel, while West Texas Intermediate (WTI) was at $68.29 per barrel. This decline in oil stocks contrasts with the previous week’s increase of 5.5 million barrels, which had added downward pressure on prices.
On Tuesday, the American Petroleum Institute (API) also reported estimated inventory declines across crude and fuel stocks, temporarily pushing prices higher. However, prices remained subdued due to expectations of a ceasefire in the Middle East. In its weekly report, the EIA noted inventory declines in both gasoline and middle distillates.
Gasoline stocks decreased by 2.7 million barrels for the week ending October 25, with production averaging 9.7 million barrels per day. This figure compares to a previous week’s inventory increase of 900,000 barrels, when production averaged 10 million barrels per day.
In the middle distillates category, the EIA estimated a decline of 1 million barrels last week, with production averaging 4.9 million barrels daily. This is compared to a stock draw of 1.1 million barrels the prior week, when production averaged 5 million barrels daily.
Despite these inventory changes, oil prices began the week on a downward trend and remained low, even with brief increases. Analysts point to the potential for a ceasefire between Israel and Lebanon as a significant factor influencing prices. Israeli Prime Minister Benjamin Netanyahu indicated that Tel Aviv might be open to ending hostilities. However, not all analysts agree that a ceasefire is imminent. Standard Chartered analysts caution that the risk of escalation in the region remains high, especially in the months leading up to the inauguration of the next U.S. president.
In other developments, Beijing plans to announce additional fiscal stimulus measures. However, the anticipated size of these measures suggests they will mainly support rather than significantly boost the country’s economy. As a result, oil traders are likely to overlook this news.
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