Crude oil prices reversed a decline earlier this week, rising after the American Petroleum Institute (API) reported the first weekly drop in U.S. inventories in over a month.
If the Energy Information Administration (EIA) confirms this dip later today, the price increase is expected to continue into the end of the week.
As of writing, Brent crude was priced at $73.21 per barrel, and West Texas Intermediate (WTI) was at $69.13 per barrel. This followed the API’s report, which estimated a decrease of over 600,000 barrels in inventories for the week ending February 12. The report’s impact on oil prices stemmed from a sharp contrast to analyst predictions, which had anticipated a significant increase of 2.3 million barrels, with some even expecting a build of 2.6 million barrels.
On the other hand, expectations of a potential peace deal between the U.S. and Russia regarding Ukraine continued to weigh on prices. If such a deal is reached, U.S. sanctions on Russia could be lifted, easing uncertainty around Russian oil exports. ING analysts noted that the deal could be signed later this week, moving closer to lifting sanctions and reducing supply concerns in the market.
Further affecting prices, U.S. consumer sentiment hit its lowest point in eight months, with inflation concerns high. Additionally, Germany, Europe’s largest economy, reported a contraction for another quarter at the end of 2024.
However, on the positive side, U.S. policy toward Iran is expected to provide support for oil prices. Still, tariffs on trading partners, such as China, may offset concerns about oil supply tightening due to the anticipated negative impact tariffs could have on oil demand.
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