WTI price retreated after reaching the six-month high at $79.37 on Wednesday.
EIA Crude Oil Stocks Change dropped for the eighth consecutive week, bringing it to its lowest level since April 2022.
The US has broadened sanctions on Russian Oil producers and tankers, forcing Moscow's customers to seek alternative supplies.
West Texas Intermediate (WTI) Oil price retreats after reaching six-month highs, gaining more than 3%, in the previous session, trading around $78.50 per barrel during the European hours on Thursday. However, crude Oil prices gained ground due to tighter supply concerns and declining US stockpiles.
The US Energy Information Administration (EIA) data showed an eighth consecutive weekly decline in commercial crude inventories, now at their lowest level since April 2022. This represents the longest streak of declines since 2021, with inventories currently at a six-year seasonal low.
Additionally, concerns over potential supply disruptions have intensified due to new US sanctions targeting Russian Oil revenue. The US has expanded sanctions on Russian Oil producers and tankers, prompting Moscow's key customers to search globally for alternative supplies. Meanwhile, shipping rates have also surged as a result.
However, the US Energy Information Administration (EIA), in its Short-Term Energy Outlook report released on Tuesday, indicated that Oil prices are likely to face downward pressure over the next two years as global production growth outpaces demand.
Global Oil demand is now projected to average 104.1 million barrels per day (bpd), revised down from the previous estimate of 104.3 million bpd and still trailing pre-pandemic levels. According to Reuters, many analysts expect an oversupplied Oil market by 2025, driven by a significant slowdown in demand growth in 2024, particularly in the world's largest energy-consuming nations, the US and China.
According to Reuters, Rory Johnston, founder of Commodity Context, stated that the Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, are likely to remain cautious about increasing supply despite the recent surge in Oil prices. OPEC+ has been curtailing output over the past two years to support the market.
* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.
