Crude oil prices remained stable on Wednesday after the U.S. Energy Information Administration (EIA) reported an estimated draw of 1 million barrels in crude oil inventories for the first week of 2025.
Alongside this, the EIA also noted increases in fuel inventories, though both gasoline and diesel stocks still remain below the five-year average.
The current crude inventory draw follows a similar decrease of 1.2 million barrels in the final week of 2024. During that time, significant increases in gasoline and middle distillates did not trigger a bearish market response.
This week, oil prices have been rising, supported by expectations of a tightening market and a report from the American Petroleum Institute (API) showing a notable 4 million barrel decrease in crude oil stocks in early January. The API also forecasted large inventory builds for fuels.
In terms of gasoline, the EIA estimated a rise of 6.3 million barrels in inventories, with daily production averaging 8.9 million barrels. This is slightly lower than the 7.7 million barrel build seen in the last week of 2024, when gasoline production was higher at 9 million barrels per day.
For middle distillates, the EIA reported a build of 6.1 million barrels, with daily production averaging 5.2 million barrels.
Oil prices have been trending upwards this week, fueled by expectations of tighter global supply. Market optimism is driven by the expectation that the incoming U.S. President, Trump, will enforce stricter sanctions on Iran. Additionally, reports suggest OPEC+ output declined in December.
Traders have increased their bullish positions in oil over the past few weeks, anticipating swift actions on sanctions and potential supply constraints. Some market watchers also expect demand weakness to peak this year rather than worsen.
However, not everyone shares this optimism. Analysts from BMI have maintained a more bearish outlook, forecasting that Brent crude will average $76 per barrel in 2025, down from $80 per barrel in 2024. They base this outlook on their supply-demand data, which predicts that supply growth will surpass demand growth by 485,000 barrels per day.
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