West Texas Intermediate (WTI) oil prices dipped to around $68.70 during Thursday’s Asian trading hours. Despite this decline, crude prices found support due to growing optimism about US fuel demand, especially following an unexpected drop in crude inventories.
The US Energy Information Administration (EIA) reported a decrease of 0.515 million barrels in crude oil stockpiles for the week ending October 25. This was surprising, as the market had expected an increase of 2.3 million barrels.
Additionally, crude oil prices may receive further support from expectations that OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies like Russia, might delay a planned production increase. Reuters reported that OPEC+ could postpone its December output increase by at least a month due to concerns about weak oil demand and rising supply. The group had planned to increase production by 180,000 barrels per day in December, having already postponed a similar increase from October due to falling prices.
Meanwhile, markets are closely watching ongoing geopolitical tensions in the Middle East. Israel’s military chief warned of a “very hard” strike on Iran if missile attacks continue.
Lebanese Prime Minister Najib Mikati stated on Wednesday that US envoy Amos Hochstein suggested a possible ceasefire in the Israel-Hezbollah conflict could be achieved before the US elections on November 5. Hochstein traveled to Israel to discuss ceasefire terms with Hezbollah, as confirmed by US State Department spokesperson Matthew Miller.
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