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On Wednesday, oil prices continued their upward trajectory from the previous day, supported by data indicating a more significant-than-expected decline in US crude inventories last week. However, gains were tempered by a larger-than-anticipated increase in gasoline and distillate inventories.
Brent crude futures saw an increase of 29 cents, or 0.4 percent, reaching $77.88 per barrel by 0138 GMT, while US West Texas Intermediate crude futures also rose by 29 cents, or 0.4 percent, settling at $72.53 per barrel.
Tuesday witnessed a two percent rise in both benchmarks, driven by the ongoing Middle East crisis and disruptions to Libyan supplies.
According to data from the American Petroleum Institute, US crude oil inventories experienced a notable decrease of 5.2 million barrels in the week ending January 5, surpassing analysts’ estimates of a 700,000 barrel increase in a Reuters poll. However, the surge in gasoline inventories by 4.9 million barrels and distillates by 6.9 million exceeded expectations, which were set at 2.5 million and 2.4 million, respectively.
Investors are eagerly awaiting the Energy Information Administration’s data, the statistical arm of the US Department of Energy, scheduled for release at 1530 GMT on Wednesday.
In terms of supply dynamics, the Energy Information Administration forecasted on Tuesday that US crude oil production would reach record levels over the next two years, albeit at a slower growth rate.
Amidst geopolitical tensions in the Middle East, US Secretary of State Anthony Blinken urged Israel on Tuesday to make “difficult decisions” to normalize relations with more neighboring countries, emphasizing the importance of facilitating the establishment of a Palestinian state.
Investors are also closely monitoring signals from the Federal Reserve regarding potential interest rate adjustments. Expectations for a rate cut diminished in March, adding an additional layer of complexity to the market landscape.
