Crude oil prices edged higher today following the release of the U.S. Energy Information Administration’s (EIA) latest inventory data, which showed an increase of 2.1 million barrels in crude oil stocks for the week ending November 8. However, fuel inventories saw a decline.
At the time of writing, Brent crude was priced at $72.75 per barrel, while West Texas Intermediate (WTI) was at $68.89 per barrel, both marking an increase from earlier levels.
The EIA’s inventory build this week mirrored the previous week’s increase, which had put downward pressure on oil prices. In contrast, the American Petroleum Institute (API) had reported a surprise draw of 777,000 barrels in crude oil inventories a day earlier. API also noted a draw in gasoline inventories and a rise in middle distillates.
Gasoline inventories dropped by 4.4 million barrels for the week ending November 8, with production averaging 10.3 million barrels per day. This was a significant shift from the previous week, when gasoline stocks had increased by 400,000 barrels, and production averaged 9.7 million barrels per day.
In middle distillates, the EIA estimated a decline of 1.4 million barrels in inventory, with production at 5 million barrels per day. This was in contrast to the previous week’s increase of 2.9 million barrels, with production standing at 5.1 million barrels per day.
While oil prices rose on Wednesday, they later reversed these gains today amid concerns about lower demand expectations and signs of ample supply. Both OPEC and the International Energy Agency (IEA) have suggested that the market will remain well-supplied throughout this year and into next.
Priyanka Sachdeva from Phillip Nova told Reuters that the oil market is responding to OPEC’s cautious approach. “OPEC has deferred rolling back additional production for another month, fearing the impact on prices amid weaker demand forecasts,” Sachdeva said.
OPEC recently downgraded its oil demand forecast for this year, now projecting a rise of 1.82 million barrels per day, down from 1.93 million bpd in its previous report. For 2024, global oil demand is expected to reach 104.0 million bpd, driven by strong demand for transportation fuels and robust economic growth in several non-OECD countries.
Meanwhile, the IEA raised its demand forecast for this year but warned of a potential supply surplus in 2025.
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