Oil prices experienced a decline on Thursday following an unexpected increase in U.S. gasoline inventories, as market participants turn their attention to the upcoming OPEC+ meeting scheduled for this weekend. Brent crude futures dropped by 20 cents, or 0.27%, settling at $72.63 per barrel, while U.S. West Texas Intermediate (WTI) crude futures fell by 21 cents, or 0.29%, to $68.52 a barrel.
The trading environment is expected to remain subdued due to the U.S. Thanksgiving holiday, which began on Thursday. Analysts suggest that oil may continue its bearish trend in the near term, driven by fading risks of supply disruptions in the Middle East and a higher-than-anticipated rise in U.S. gasoline stocks. Yeap Jun Rong, a market strategist at IG, noted that U.S. gasoline inventories surged by 3.3 million barrels for the week ending November 22, contradicting expectations for a slight draw ahead of the busy holiday travel season.
The ongoing slowdown in fuel demand growth from major consumers like China and the United States has placed additional pressure on oil prices this year. However, supply cuts from OPEC+, which includes the Organization of the Petroleum Exporting Countries and its allies, have helped mitigate further losses.
As OPEC+ prepares for its meeting on Sunday, two sources indicated that members are contemplating delaying a planned increase in oil production that was set to begin in January. This potential deferment has largely been anticipated by the market, according to Suvro Sarkar from DBS Bank, who remarked that the key question remains whether this delay will be for one month, three months, or longer.
Brent and WTI crude have both seen declines of more than 3% this week alone, influenced by Israel’s recent ceasefire agreement with Hezbollah, which alleviated fears of disruptions to oil supplies from the Middle East.
Despite these developments, uncertainty looms over how long the ceasefire will last and what broader geopolitical implications may arise. Analysts at ANZ Bank highlighted that while oil prices are currently undervalued due to market deficits, risks remain concerning Iranian supply amid potential sanctions under President-elect Donald Trump’s administration.
In summary, as investors await clarity from OPEC+ regarding future output strategies and navigate fluctuating geopolitical landscapes, oil prices are poised for continued volatility.
READ MORE:
Bank Of Korea Surprises Markets With Back-To-Back Rate Cuts Amid Economic Uncertainty
Heidelberg Materials Expands U.S. Presence With $600 Million Acquisition Of Giant Cement Holding
European Stocks Rebound As Tech Shares Surge Amid Easing Trade Fears
