Oil Holds Gains After Significant U.S. Stockpile Drop in Two Months

Oil prices held steady after a notable drop in US crude stockpiles, marking the largest decline since mid-June and keeping inventories significantly below the seasonal norm.

Brent crude traded at approximately $67 per barrel following a 1.6% rise on Wednesday, while West Texas Intermediate was valued at $63. Data from the Energy Information Administration revealed a decrease of 6 million barrels in nationwide crude inventories last week, with gasoline supplies also diminishing for the fifth consecutive week.

Despite these recent advances, oil prices are still more than 10% lower this year due to concerns about the effects of US trade policies and the reduction of OPEC+ production cuts, which increases the risk of oversupply as summer demand peaks concludes. Traders are also monitoring progress toward a ceasefire in the ongoing conflict in Ukraine.

While Moscow has managed to keep its oil exports flowing despite severe sanctions, much of that oil has been redirected to India. The US government has voiced its concerns, criticizing India for its acquisition of Russian crude, with President Donald Trump cautioning New Delhi about potential economic repercussions.

In addition, crude stocks at Cushing, Oklahoma—the primary US storage facility—rose for the seventh straight week, as stated by the EIA. This point of delivery for WTI futures has seen an increase in supply from the Permian Basin recently.

“Over the long term, it is essential to focus on the fundamentals and anticipate a downward trend that may continue at least until mid-next year,” remarked John Driscoll, director and founder of the consulting firm JTD Energy Services Pte based in Singapore.

Prices:
Brent for October delivery rose by 0.4% to $67.09 per barrel as of 1:15 p.m. in Singapore. WTI for October delivery increased 0.5% to $63.00 per barrel.

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