Oil Prices Little Changed as Surprise Build in US Gasoline Stocks Weighs on Market
Oil prices were steady on Wednesday, with benchmark Brent crude futures settling 2 cents higher at $72.83 a barrel, while US West Texas Intermediate crude slipped 5 cents to $68.72. The market was pressured by a large surprise build in US gasoline stocks and worries about US interest rate cuts next year.
According to the Energy Information Administration, US gasoline stocks rose by 3.3 million barrels in the week to 212.2 million barrels, counter to analysts’ expectations for a draw of 46,000 barrels. Crude stocks, on the other hand, fell by 1.8 million barrels in the week ended November 22, exceeding analysts’ expectations for a draw of 605,000 barrels.
Oil prices were also impacted by US data showing that progress on lowering inflation has stalled in recent months, which could narrow the scope for the Federal Reserve to cut interest rates in 2025. This could keep the cost of borrowing elevated, slowing economic activity and dampening demand for oil.
However, the market drew support from concerns about supply, which were eased after a ceasefire deal was reached between Israel and Hezbollah. Oil prices also gained support after sources from the OPEC+ group said they are discussing a further delay to the oil output increase set for January.
Despite the mixed signals, oil industry analysts and traders remain optimistic about the market, citing a market deficit and risk to Iranian supply from possible sanctions when US President-elect Donald Trump takes office.
