Crude oil prices edged higher today after the U.S. Energy Information Administration (EIA) reported a 900,000-barrel decline in inventories for the week ending December 13.
This figure contrasts with the 4.7 million-barrel inventory draw estimated by the American Petroleum Institute (API) for the same week on Tuesday.
A week earlier, the EIA reported a more moderate crude oil inventory draw of 1.4 million barrels, with substantial increases in fuel stocks that reduced the bullish impact of the crude inventory decline.
For the week ending December 13, the EIA also reported mixed changes in gasoline and middle distillate inventories.
Gasoline inventories rose by 2.3 million barrels during the reporting period, with production averaging 9.9 million barrels per day. This was in contrast to a larger inventory build of 5.1 million barrels the previous week, when production was estimated at 10 million barrels per day.
In middle distillates, the EIA recorded an inventory decline of 3.2 million barrels for the second week of December, with production at an average of 5.1 million barrels per day. This was compared to an inventory build of 3.2 million barrels for the previous week, with production at 5.2 million barrels per day.
Meanwhile, oil prices remained largely unchanged from Tuesday as traders await the Federal Reserve’s rate decision. A Reuters poll conducted last week indicated that the central bank was expected to cut rates by 25 basis points during the December meeting and keep them steady in January.
“Projections for rate cuts in 2025 are being questioned, especially with Trump planning a comeback on January 20,” said Priyanka Sachdeva, an analyst at Phillip Nova. She added that “The prevailing narrative is that Trump’s policies may lead to inflation, and concerns about potential interference with the Federal Reserve’s independence are keeping oil investors cautious.”
Additionally, the latest sanctions announced by the UK and the EU against Russia are believed to limit the downward potential for oil prices, although their effect is expected to be short-lived, with the focus remaining on the Fed’s upcoming rate decision.
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