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Oil prices held steady for a second consecutive day on Wednesday as geopolitical tensions from the Ukraine war balanced against signs of stronger crude imports from China and a rise in U.S. crude stockpiles.
Brent crude futures for January delivery edged up by $0.11 to trade at $73.42 per barrel as of 07:30 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures for December delivery, which are set to expire on Wednesday, were flat at $69.39 per barrel. The more active WTI January contract gained $0.18, trading at $69.42 per barrel.
Ukraine Conflict Sustains Market Floor
The ongoing war between Russia, a key global oil supplier, and Ukraine continues to underpin oil prices. Recent developments include Ukraine’s use of U.S.-supplied ATACMS missiles to strike Russian territory, leading to heightened tensions. In response, Russian President Vladimir Putin lowered the threshold for potential nuclear retaliation, amplifying concerns over supply disruptions.
U.S. Crude Stockpiles Rise, Refined Product Inventories Drop
On the supply front, U.S. crude oil inventories rose by 4.75 million barrels for the week ending November 15, according to the American Petroleum Institute. This figure significantly exceeded analysts’ expectations of a 100,000-barrel increase, pointing to ample supply in the world’s largest oil consumer.
In contrast, refined product inventories provided some market support. Gasoline stocks fell by 2.48 million barrels, against expectations for a 900,000-barrel increase, while distillate stocks dropped by 688,000 barrels. Official government inventory data is due later on Wednesday, which could further influence market sentiment.
China’s Crude Imports Offer Demand-Side Optimism
On the demand side, China’s crude imports, a critical driver for global oil markets, appear to have surged. Data from vessel tracker Kpler indicates that China’s November crude imports are on track to reach or approach record highs. This marks a reversal from weak import activity earlier in the year, which had contributed to a 20% drop in Brent prices from their April peak of over $92 per barrel.
China’s renewed crude purchasing activity could provide a much-needed boost to global oil demand as the world’s largest importer attempts to restock following a period of subdued buying.
