Oil prices remained steady yesterday as robust winter fuel demand balanced concerns over rising US fuel inventories and global economic uncertainties.
Brent crude futures eased 6 cents to $76.10 per barrel, while US West Texas Intermediate (WTI) crude fell 5 cents to $73.27. Both benchmarks dropped over 1 per cent on Wednesday due to a stronger US dollar and a larger-than-expected build in US fuel stockpiles.
“The oil market is facing conflicting forces—seasonal demand supports prices, while macroeconomic data and a stronger US dollar constrain further gains,” said Kelvin Wong, senior market analyst at OANDA.
Analysts at JPMorgan forecast global oil demand to rise by 1.4 million barrels per day (bpd) in January compared to last year, reaching 101.4 million bpd. The surge is attributed to higher heating fuel consumption in colder-than-usual winter conditions and increased travel activity in China ahead of the Lunar New Year.
Brent’s front-month contract premium over its six-month contract widened to its highest level since August, indicating tighter supply. However, data from the US Energy Information Administration showed rising gasoline and distillate inventories, which capped price gains.
The US dollar strengthened further yesterday, supported by higher Treasury yields as investors await policy signals from President-elect Donald Trump, who is set to assume office on January 20.
Meanwhile, Saudi Arabia’s crude oil supply to China is expected to drop in February. Trade sources attribute the decline to the kingdom’s recent increase in official selling prices to Asia, its first hike in three months. __Reuters
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