Oil Prices Continue to Decline Amid Global Factors
December WTI crude oil (CLZ24) is down -0.73%, while December RBOB gasoline (RBZ24) has decreased by -0.96%.
Market Response to International Developments
Today, crude oil prices continued to decline, extending Monday’s drop of -6.13%. This decrease was influenced by a limited retaliatory strike by Israel, easing concerns about escalating tensions with Iran. Iran announced that its oil industry remains unaffected, as Israel did not target any Iranian oil facilities.
Truce and Strategic Oil Reserves
A potential short truce in Gaza, influenced by Israel’s willingness to negotiate for hostage releases, has further lowered the risk premium in oil prices. Additionally, the U.S. Energy Department declared plans to add 3 million barrels of oil to the Strategic Petroleum Reserve, providing some support to the market.
Global Crude Supply Dynamics
A bullish sign for oil prices came from a report by Vortexa, which revealed that the volume of crude oil on stationary tankers dropped by -18% week-over-week to 55.49 million barrels as of October 25. However, concerns remain over weakened crude demand in China, where oil consumption fell -6.98% year-on-year to 14.176 million barrels per day (bpd) in September. For the first nine months of the year, overall demand is down -3.8% to 13.99 million bpd.
Libya’s Rising Output and OPEC+ Decisions
Libya’s crude production is also increasing, reaching 1.3 million bpd after resolving a political impasse that had earlier disrupted exports. This boosted global crude supplies. In contrast, OPEC+ recently decided to pause a planned output increase of 180,000 bpd for October and November, responding to the declining crude prices and weak global energy demand.
Russian Exports and Domestic Production Insights
On another note, Russia’s crude exports rose by +150,000 bpd to 3.46 million bpd as of October 20, exacerbating bearish sentiments. Russia’s own crude production also saw a slight decline, averaging 8.97 million bpd in September, just below targets set with OPEC+.
U.S. Inventory and Rig Counts
Recent data from the EIA indicated that U.S. crude oil inventories as of October 18 were -3.6% below the seasonal five-year average, while gasoline and distillate inventories were also lower than typical levels. U.S. crude production held steady at a record high of 13.5 million bpd. However, Baker Hughes reported a small decrease in active U.S. oil rigs, falling to 480, just above the 2.5-year low reached in July.
More Crude Oil News from Barchart
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
