The price of oil fell by 0.4% amid increased concern about demand from the United States (the largest consumer of motor fuel). The renewed growth of the US dollar also put pressure on the oil market. But trading is expected to be light due to U.S. holiday.
Yesterday's report from the Energy Information Administration (EIA) showed that U.S. gasoline inventories unexpectedly rose ahead of the Thanksgiving holiday, while crude oil inventories fell more than expected as imports slumped. Gasoline stocks rose by 3.3 million barrels in the week ended Nov. 22 to 212.2 million barrels. Economists had expected a reduction of 46,000 barrels. Gasoline supplied, a proxy for demand, only edged up to 8.51 million barrels per day (bpd) from 8.42 million bpd in the previous week. Crude inventories fell by 1.8 million barrels to 428.4 million barrels in the week. Consensus estimates suggested a drop of 1.1 million barrels. Net U.S. crude imports fell 1.9 million bpd to 1.4 million bpd, mainly due to a 1.6 million bpd slump in imports to 6.1 million bpd, while exports rose by 285,000 bpd to 4.7 million bpd. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 909,000 barrels. Distillate stockpiles, which include diesel and heating oil, rose by 400,000 barrels in the week to 114.7 million barrels, versus expectations for a 100,000-barrel rise.
Overall, the slowdown in fuel demand growth from the largest consumers - the United States and China - has put strong pressure on oil prices this year, although the reduction in OPEC+ supplies has limited losses. However, earlier this week, sources reported that OPEC+ members are discussing a further postponement of the planned increase in oil production, which was supposed to begin in January. The group is to meet on Sunday to decide policy for the early months of 2025.
The easing of geopolitical tensions in the Middle East is also putting pressure on prices, as the risks of oil supply disruptions from the region have decreased. Yesterday, a truce began between Israel and the Lebanese Hezbollah group, while market participants are uncertain how long the break in the fighting will hold, with the broader geopolitical backdrop for oil remaining murky.