After an 1.8% gain in the prior trading day, futures on US West Texas Intermediate Crude Oil traded little changed on Thursday, as investors weighed a drop in US crude stocks against a surge in Russian oil output and global recession concerns.
The official report by the US Energy Information Administration (EIA) showed on Wednesday crude oil inventories had decreased by 7.056 million barrels during the week ended August 12th – the biggest drop since early April. Analysts on average had anticipated a much smaller decrease – by 0.275 million barrels.
RBC Capital’s Mike Tran said the oil market remained in a multi-year tightening cycle.
“The recession fears are well acknowledged, but the bullish catalysts such as the return of China or supply degradation from Russia remain elusive,” Tran was quoted as saying by Reuters.
On the supply side, Russia has begun to gradually raise oil output after sanctions and purchases from Asian nations have increased.
According to an economy ministry document, Russia has revised up its production and export forecasts until the end of 2025, with energy export earnings projected to surge 38% in 2022.
Meanwhile, a report by the Joint Organizations Data Initiative (JODI) showed yesterday Saudi Arabia’s crude exports had increased in June and production had reached highs unseen in over two years.
The oil market is also waiting for some development in negotiations to revive Iran’s 2015 nuclear deal, which could eventually bolster the nation’s oil exports.
As of 8:31 GMT on Thursday WTI Crude Oil Futures were edging up 0.23% to trade at $88.31 per barrel. Earlier this week the black liquid went down as low as $85.73 per barrel, which has been its weakest price level since January 26th ($85.01 per barrel).
At the same time, Brent Oil Futures were gaining 0.77% on the day to trade at $94.37 per barrel. Earlier this week Brent Oil went down as low as $91.51 per barrel, which has been its weakest price level since February 18th ($90.12 per barrel).
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