Oil prices are down again on Thursday, continuing a drop from the day before. This decline is mainly due to a large increase in U.S. fuel inventory levels. However, worries about reduced supplies from OPEC (countries that produce a lot of oil) and Russia helped prevent prices from falling too much.
Brent crude oil prices fell 28 cents, or 0.4%, bringing them to $75.88 a barrel. Meanwhile, U.S. West Texas Intermediate crude dropped 30 cents, also down 0.4%, settling at $73.02. Both these types of oil lost over 1% just a day earlier. The reason for the drop is a stronger U.S. dollar and more fuel in stock than analysts expected.
According to the U.S. Energy Information Administration, gasoline supplies grew by 6.3 million barrels last week, reaching 237.7 million barrels. Experts predicted only a 1.5 million-barrel increase. Distillate supplies, which include diesel fuel, also went up by 6.1 million barrels to 128.9 million barrels, far above the expected 600,000-barrel rise. However, crude oil supplies actually dropped by 959,000 barrels, while analysts thought there would be a small decline of 184,000 barrels.
Though there’s been a lot of fuel inventory growth, prices aren’t falling too much because winter demand is increasing in the northern hemisphere. Hiroyuki Kikukawa, president of NS Trading, mentioned that people are likely to hold off on making big trades until the new U.S. President takes office on January 20.
In the market, the difference in price between the first-month Brent future contract and the six-month contract reached its highest level since August 2024. This difference reflects worries about tight supply and hopes for more demand from China.
A survey from Reuters showed that oil production from OPEC fell in December after two months of increases. Maintenance work in the United Arab Emirates impacted overall production. Meanwhile, in Russia, oil production averaged 8.971 million barrels a day in December, which is below their target goals.
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