Oil prices declined on Wednesday following an industry report indicating an increase in crude and fuel inventories in the U.S., the largest consumer of crude globally. This development has intensified worries that supply is outpacing demand in the market. Brent crude futures experienced a decline of 28 cents, equivalent to 0.43%, settling at $64.61 per barrel as of 0200, following a 1.1% increase in the prior session. U.S. West Texas Intermediate crude futures experienced a decline of 24 cents, or 0.4%, settling at $60.5 a barrel, following a 1.4% increase on Tuesday. According to market sources, U.S. crude and fuel inventories experienced an increase last week, as reported by figures from the American Petroleum Institute. Crude stocks experienced an increase of 4.45 million barrels for the week ending November 14. Concurrently, gasoline inventories rose by 1.55 million barrels, and distillate inventories saw an uptick of 577,000 barrels, as reported by the API, based on the sources available.
A report on Wednesday indicated that the API data revealing increases in crude and fuel inventories “pointed to weak demand and a bearish outlook for oil prices.” Later on Wednesday, official inventory data from the U.S. government will be made available. On average, a decline in crude inventories of approximately 600,000 barrels for the week ending November 14. Prices increased on Tuesday as investors evaluated the implications of U.S. sanctions on Russian oil exports, alongside heightened concerns regarding crude and fuel disruptions due to Ukrainian attacks on Russian refineries and export terminals. Concerns regarding Russian supply are being balanced with analysts’ projections indicating that oil production exceeds current demand, thereby exerting downward pressure on prices.
In the wake of Ukrainian assaults on Russian energy and port infrastructure, European diesel fuel profit margins have experienced a significant increase, attaining their peak levels since September 2023 on Tuesday. This phenomenon is taking place alongside a rise in refinery margins on a global scale. The Haitong report highlighted that “oil prices have found support from the strong diesel market but the persistent crude oversupply is keeping investors cautious about chasing further gains in crude.”
A senior White House official stated on Monday that U.S. President Donald Trump is prepared to endorse legislation progressing through Congress aimed at imposing additional sanctions on Russia, provided he maintains ultimate control over its execution. Additional secondary sanctions targeting buyers of Russian crude are expected to sustain upward pressure on oil prices.