Nov 20 2024: Oil prices remained largely unchanged for the second consecutive day on Wednesday, as rising geopolitical tensions and signs of increased Chinese crude imports offset concerns about growing U.S. crude inventories.
Key Market Movements:
- Brent crude futures slipped 5 cents to $73.26 per barrel by 05:41 GMT.
- West Texas Intermediate (WTI) crude held steady at $69.39 per barrel.
Geopolitical Tensions Provide Support:
Escalating hostilities in the Russia-Ukraine war have underpinned oil prices this week. On Tuesday, Ukraine deployed U.S. ATACMS missiles against Russian targets for the first time, prompting Russian President Vladimir Putin to lower the threshold for potential nuclear retaliation.
“This renewed escalation brings supply disruption risks back into focus,” noted ANZ analysts. Market strategist Yeap Jun Rong of IG added that Brent prices are likely to stay above $70 as geopolitical developments unfold.
U.S. Inventory Data Signals Mixed Demand:
U.S. crude stocks rose by 4.75 million barrels last week, far exceeding analysts’ expectations of a 100,000-barrel increase, according to the American Petroleum Institute.
- Gasoline inventories: Declined by 2.48 million barrels versus a projected increase of 900,000 barrels.
- Distillate stocks: Fell by 688,000 barrels.
Official inventory data from the U.S. Energy Information Administration is expected later on Wednesday.
China’s Rising Oil Imports:
China, the world’s largest crude importer, appears to have ramped up purchases in November, potentially reaching record-high levels, according to vessel tracking data from Kpler. This comes after a period of subdued imports that had pressured oil prices, with Brent declining 20% from its April peak of over $92 per barrel.
The market remains on edge, balancing geopolitical risks against supply-demand dynamics as traders await further data and developments.
