Geopolitical risks partially ameliorate pressure on unexpected increases in inventories Crude oil futures closed lower slightly

Financials reported on January 21 that the rise in domestic crude oil supply in the United States for the first time in eight weeks has weighed on energy prices, but geopolitical risks have offset some of the decline in oil prices, and crude oil futures have closed slightly lower, but continue to remain near near near-half-year highs.

West Texas Intermediate Crude Oil (WTI) futures for February delivery on the New York Mercantile Exchange fell 6 cents, or nearly 0.1 percent, to close at $86.90 a barrel on Thursday. February WTI futures expire after today's close. The new spot futures, March WTI futures, closed down 25 cents, or 0.3 percent, at $85.55 a barrel.

Phil Flynn, a senior market analyst at oil futures group, said the supply of crude oil in the United States has increased unexpectedly. Although smaller than the figures released by the trade group American Petroleum Institute later Wednesday, a report released by the Strategic Petroleum Reserve "enhanced" crude oil supplies. EIA data shows that SPR inventories fell slightly by 1.4 million barrels. Government agencies also reported Thursday that U.S. crude inventories, excluding SPRs, had increased by 500,000 barrels in the week ended Jan. 14.

According to a survey conducted by S&P Global Platts Energy News, analysts had previously forecast an average of 700,000 barrels of decline. According to sources, the American Petroleum Institute reported on Wednesday that oil production rose by 1.4 million barrels. Since Monday is a Martin Luther King Jr. holiday, this week's data was delayed by a day.

Matt Smith, Kpler's chief U.S. oil analyst, said the increase in crude inventories reported by the U.S. Energy Information Administration comes after seven consecutive weeks of declines in crude inventories while refinery production fell to its lowest level since mid-November. The EIA also reported a 5.9 million barrel increase in gasoline stocks and a 1.4 million barrel decrease in distillate stocks.

"Gasoline inventories are indeed higher than expected, but the supply of ready-to-use gasoline remains relatively tight," Flynn said. Gasoline supply is expected to increase this time of year, so "it's not surprising if you look at the week's gasoline demand, which rose modestly from last week's decline." ”

The S&P Global Platts Energy Data survey expects gasoline supplies to increase by 2.4 million barrels and distillate inventories to decrease by 1.1 million barrels. EIA data shows crude oil inventories in Cushing, Oklahoma. Last week, crude oil production at the Delivery Center of the New York Mercantile Exchange edged down 1.3 million barrels.

Kpler's Smith said: "Gasoline inventories have increased significantly again, adding 35 million barrels, or 17 percent, over the past eight weeks. Distillate inventories fell for five consecutive weeks due to a strong rebound in implied demand. ”

Michael Hewson, chief market analyst at CMC Markets UK, said in a latest market report that overall oil prices "continue to be bullish and are expected to approach $100 a barrel in the coming weeks with increasingly high forecasts". "As the UK lifts recent restrictions on the outbreak, expectations for demand continue to rise as we enter the spring, and supply chain restrictions help limit the downtrend," he said.

Oil traders are also continuing to keep an eye on developments in Ukraine as U.S. President Joe Biden said he believed Russian President Vladimir Putin would "take action against Ukraine" but did not want "all-out war," the BBC reported on Thursday.

Natural gas futures extended the recent decline, even as the U.S. Energy Information Administration report shows weekly declines in U.S. natural gas supply are larger than the five-year average. The EIA reported Thursday that domestic natural gas supplies in the U.S. had fallen by 206 billion cubic feet in the week ended Jan. 14. By contrast, analysts at the S&P Global Platts Energy Intelligence Survey expect China's natural gas supply to fall by an average of 193 billion cubic feet. Analysts expect China's natural gas supply to fall by an average of 167 billion cubic feet over the next five years.

This article originated from the financial world