Oil Prices Fall as Traders Eye Higher US Production and Inventory Data
Oil prices fell slightly in Asian trade on Thursday, extending a recent downturn as traders braced for higher US production under President Donald Trump and awaited more data on US inventories. Crude prices tumbled from a near six-month high in the past week, as uncertainty over Trump’s energy and trade policies weighed.
The signing of a ceasefire between Israel and Hamas also sapped some risk premium from crude. However, overall losses in oil were still limited by expectations of increased heating demand, as a polar vortex sparked cold weather in the US and Europe. Recent US sanctions against Russia also underpinned oil with the prospect of tighter supplies.
Brent crude expiring in March fell 0.3% to $78.80 a barrel, while West Texas Intermediate crude fell 0.2% to $75.27 a barrel by 20:21 ET (01:21 GMT).
US inventories were seen increasing after five weeks of draws, according to data from the American Petroleum Institute (API). The API data usually heralds a similar trend from the Energy Information Administration (EIA), which is due later on Thursday. A Reuters poll showed that analysts expect oil inventories to have shrunk last week, but product inventories likely increased.
Cold weather in the US spurred increased demand for heating, while also disrupting crude production in the Gulf of Mexico. However, it also disrupted travel in large swathes of the country, especially during the year-end holiday season.
Trump’s energy and trade policies were also a point of concern, given that he threatened to impose tariffs on several major economies, mainly China, Canada, and Mexico. Higher US production, which already averaged at record highs of 13 million barrels per day in 2024, is likely to further loosen oil supplies, offsetting lower output in other parts of the world, especially the Organization of Petroleum Exporting Countries.