Brent inches lower amid supply glut fears

The front-month ICE Brent contract has lost by $0.27/bbl on the day, to trade at $60.03/bbl at 09.00 GMT.

IMAGE: Oil pump jacks. Getty Images

Upward pressure:

Brent crude’s price has felt some upward pressure after the US Energy Information Administration (EIA) released its latest crude stocks report.

Commercial US crude oil inventories have decreased by 1.3 million bbls to 424.4 million bbls for the week ending 12 December, according to data from the EIA.

The draw was primarily driven by “stronger exports over the week, with crude oil exports increasing 655k b/d WoW [655,000 b/d week-on-week] to 4.66m b/d [4.66 million b/d],” remarked two analysts from ING Bank.

A drop in US crude stocks usually signals stronger demand and can offer some support to Brent’s price.

Downward pressure:

Oil market participants are closely monitoring developments in Ukraine peace talks, which could bring an end to the four-year conflict with Russia.

According to media reports, Ukrainian President Volodymyr Zelensky said earlier this week that the US-mediated peace talks were in progress.

Market analysts believe that a deal could potentially ease energy-related sanctions on Moscow, returning additional barrels to a global market already facing concerns of a supply glut.

“While Russian seaborne oil exports have held up well since the imposition of sanctions on Rosneft and Lukoil, this oil is still struggling to find buyers,” ING Bank’s analysts said.

“The result is a growing volume of Russian oil at sea,” they further added.  

By Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online