WTI retraces its recent losses amid higher US Crude inventories, trades near $74.00 – Crypto News – Crypto News
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Crude Oil Futures: Recovery appears unconvincing Crude Oil Futures: Recovery appears unconvincing

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WTI retraces its recent losses amid higher US Crude inventories, trades near $74.00 – Crypto News

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  • WTI price faced the challenge as US Crude inventories rose unexpectedly.
  • US EIA Crude Oil Stocks Change rose to 2.909M barrels against the expected decrease of 2.233M barrels.
  • US-led coalition revised its compliance regime to confirm that the Russian oil was sold within the imposed price cap.
  • US Treasury Department imposed fresh sanctions on a ship manager and three oil traders engaged in the Russian oil trade.

West Texas Intermediate (WTI) price hovers around $74.00 per barrel during the Asian session on Thursday, following losses in the previous session. Crude oil prices face downward pressure due to concerns about low demand, sparked by a surprise increase in US Crude inventory.

US EIA Crude Oil Stocks Change revealed that US Crude inventories for the week ending on December 15 unexpectedly rose to 2.909 million barrels. This contrasts with the anticipated decrease of 2.233 million barrels and the prior substantial drop of 4.259 million barrels. The unexpected inventory build contributes to the bearish sentiment in the Crude oil market.

The US Energy Information Administration (EIA) added to the market dynamics by reporting that US Crude output reached a record 13.3 million barrels per day (bpd) in the last week. This marks an increase from the previous all-time high of 13.2 million bpd.

The complex dynamics in the Crude oil market continue as prices find support from escalating tensions in the Middle East. The attacks by the Iran-led Houthi militant group on commercial vessels in the Red Sea have heightened concerns. The Suez Canal, a critical waterway through which approximately 12% of world shipping traffic passes, is now facing disruptions. Several shipping companies have opted to temporarily halt all transit through the canal, adding an element of uncertainty to global shipping.

In response to these events, the United States (US) has taken proactive measures by establishing a task force. This task force is dedicated to safeguarding Red Sea commerce, underlining the significance of addressing and mitigating risks arising from the attacks on commercial vessels in the region.

The US-led coalition, overseeing the price cap on seaborne Russian oil, made significant changes to its compliance regime on Wednesday. In addition to these adjustments, the US Treasury Department imposed fresh sanctions on a ship manager owned by the Russian government and three oil traders engaged in the Russian oil trade.

Under the revised compliance regime, Western maritime service providers will soon be required to obtain declarations from their counterparties, confirming that the Russian oil was sold within the imposed price cap. The mechanism of the price cap prohibits Western companies from offering maritime services, including financing, insurance, and shipping, for oil transactions exceeding the established cap.

These measures reflect the coalition’s efforts to tighten restrictions and ensure compliance with the price cap on seaborne Russian oil, signaling ongoing economic pressures on Russia.

The Biden administration’s auction of Gulf of Mexico drilling rights on Wednesday proved to be successful, raising an impressive $382 million. According to a Reuters tally, this auction total stands as the highest for any federal offshore oil and gas lease sale since 2015.

Moreover, a survey of oil and gas executives by the Dallas Federal Reserve Bank revealed that oil and gas activity kept unchanged in the fourth quarter.

 

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