Brent edges down as supply glut anxiety builds
The front-month ICE Brent contract has moved $0.42/bbl lower on the day, to trade at $61.88/bbl at 09.00 GMT.
IMAGE: Getty Images
Upward pressure:
The American Petroleum Institute (API) has estimated a drop in US crude stocks, providing some upward support to Brent crude’s price.
US crude oil inventories decreased by 4.8 million bbls in the week ending 5 December, according to API estimates.
A drop in US crude stocks usually signals stronger demand and can offer some support to Brent’s price.
“American Petroleum Institute numbers yesterday were supportive for crude [prices],” two analysts from ING Bank noted.
Downward pressure:
Ongoing peace negotiations to end the war in Ukraine has dragged Brent’s price lower so far this week.
Ukrainian President Volodymyr Zelensky, along with other European partners will present "refined documents" on a ceasefire plan with Russia soon, Reuters reported.
Should Ukraine and Russia reach a peace agreement, global sanctions on Russian companies may be eased, allowing sanctioned oil volumes back into the market, market analysts project.
In other news, the US Energy Information Administration (EIA) has released its latest oil market outlook, estimating that US crude oil production will reach a record high of 13.61 million b/d in 2025.
“A bearish gloom has been developing over the [oil] market in recent months, not helped by a bearish report from the Energy Information Administration,” ANZ Bank’s senior commodity strategist Daniel Hynes said.
The EIA expects global liquid fuels output to rise by 3 million b/d in 2025, reaching 106.1 million b/d. Production is projected to increase by a further 1.3 million b/d in 2026, lifting total supply to 107.4 million b/d.
By Aparupa Mazumder
Please get in touch with comments or additional info to news@engine.online
