West Texas Intermediate (WTI) crude oil saw a rise today, closing at $70.43 with a gain of 98 cents. Although oil surged to $88 early last year, it has mostly hovered around the $70 mark for several months now. With the start of the year at $71.65, it’s likely heading for a slight drop by year’s end.
Today, the U.S. Energy Information Administration released its oil inventory data, revealing some interesting insights. Crude stocks decreased by 4.237 million barrels, exceeding the expected decline of 1.867 million barrels. On the other hand, gasoline stocks saw an unexpected increase of 1.63 million barrels, contrary to the anticipated drop of 1.08 million. Distillate stocks also fell by 1.694 million barrels, which was more than the forecasted 313,000 barrels. Refinery utilization ticked up by 0.7%, surpassing the expected rise of 0.4%.
Despite what some commentators might suggest, global oil inventories are tighter than they appear, although OPEC+ has ample spare capacity that they’re keeping in reserve. Looking ahead to early next year, one major issue will be the U.S. stance on Iran, particularly regarding any attempts by former President Trump to remove Iranian oil from the global market. At present, China is the biggest buyer of Iranian oil, which makes this scenario rather challenging.
From a technical standpoint, the focus is now on whether the $65 level will hold. If it can stabilize over the next few months, the seasonal boost from spring could provide some upward momentum.
