Oil prices fell on Thursday after a report showed a rise in US crude inventories, which weighed on the overall sentiment in the markets. Prices had gained in the previous session on concerns about supply disruptions from Russia.
Brent crude futures were down 17 cents at $75.87 a barrel by 0600 GMT. US West Texas Intermediate crude was down 30 cents at $71.95. This pulled back from Wednesday’s highs, which were near a one-week high. The decline was due to a report from the American Petroleum Institute that indicated a rise in oil inventories.
US stockpiles rise
According to market sources, data from the American Petroleum Institute showed a rise in US crude inventories by 3.34 million barrels during the past week. The US Energy Information Administration will release an official report on stockpiles on Thursday. The holiday in the United States last Monday delayed the data by one day.
Analysts expect about 2.2 million barrels to be added to U.S. oil inventories during the week ending February 14. If the forecast holds true, this would be the fourth consecutive build for U.S. energy companies, something that hasn’t happened since April 2024.
Tariffs and their impact on oil prices
In addition, analysts note that the Trump administration’s announced tariffs on imports could have a significant impact on oil prices. These tariffs could raise the cost of consumer goods, weakening the global economy and reducing demand for fuel. Concerns about European and Chinese demand were also factors that helped keep oil prices stable.
The impact of the attack on Russian oil supplies
It is natural to be concerned about the global economic outlook given US trade policies,” said Bjarne Schieldrop, chief commodity analyst at SEB Bank. He added that the 25% tariff on car imports could have a negative impact on global markets.
On the other hand, geopolitical events in the region have affected the oil market. Russia has announced a reduction in oil flows through the Caspian Sea pipeline, one of the main routes for crude exports from Kazakhstan. It said these flows had fallen by 30% to 40% on Tuesday after a drone attack in Ukraine on a major pumping station. According to Reuters data, the 30% reduction equates to a loss of 380,000 barrels per day of supply.
Other oil supply concerns
In addition to the challenges related to Russian oil supplies, there are other factors that could affect prices. In the Middle East, Israel and Hamas are expected to begin indirect negotiations on the second phase of a ceasefire agreement in Gaza. These negotiations could have a negative impact on oil prices, as they are likely to help reduce the risks associated with supply disruptions from the region.
At the same time, there are indications that the situation in the Kurdistan Region of Iraq may help offset the risks of oil supply. Reports have indicated that oil flows from Iraqi Kurdistan may soon resume after a prolonged interruption since early 2023. According to ING Analysis, the resumption of these flows could add 300,000 barrels per day to the market, contributing to a boost in global oil supplies.
Global Market Trends and Their Impact on Prices
At a time when concerns about global oil demand are growing due to economic conditions, fuel demand in European and Chinese markets remains crucial in determining the path of prices.
Imbalances in Supply and Demand
Analysts are closely following economic and geopolitical developments that could have a significant impact on prices. So far, oil markets seem to be in a state of anticipation, as official reports are expected to reveal the size of oil inventories and their impact on prices.
It is also important to consider the imbalances that may occur between supply and demand for oil. The increase in oil inventories in the United States may reflect a shifting balance between production and demand, reinforcing expectations of increased supply. On the other hand, political and economic factors may continue to increase risks affecting fuel demand, contributing to reducing pressure on prices.
When considering the effects of import tariffs and the ongoing threat of supply disruptions, oil markets are in a precarious position. This could affect the strategies of energy companies seeking to adapt to these rapid shifts in supply and demand.
Oil Price Outlook
Expectations indicate that oil prices may remain under pressure due to these concerns, in addition to the challenges facing global oil supplies.
Ultimately, it remains unclear to what extent prices will continue to fluctuate. However, the global situation is certainly facing several challenges that require caution in market expectations. Despite the improvement of some supply factors, such as the return of oil flows from Iraqi Kurdistan, many other factors, including the geopolitical and economic situation, may determine the path that oil prices will take in the coming months. In light of these changes, it seems that oil prices will remain vulnerable to many influential factors, whether economic or political, which makes it necessary to closely follow developments at the local and international levels.
