Brent crude holds above $76 amid mixed market signals
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Brent crude oil futures stabilized above $76 per barrel on Thursday, recovering from earlier losses as investors weighed rising US fuel inventories against tightening global supplies and seasonal demand expectations.
US inventory data
Crude stockpiles declined by 1 million barrels, marking the seventh consecutive weekly drop and indicating tighter supply.
Gasoline inventories increased by 6.3 million barrels, while distillate stocks rose by 6.1 million barrels, reflecting weaker demand for refined products.
OPEC and Russian output
OPEC production fell in December after two months of growth, with UAE field maintenance offsetting gains in Nigerian output.
Russian oil output slipped below OPEC+ targets, with exports hitting their lowest level since August 2023, adding to supply concerns.
Demand and seasonal trends
US heating fuel demand is expected to rise with approaching cold weather, offering short-term support to prices.
China’s weak inflation data signaled deflationary pressures and softer domestic demand, raising concerns for global consumption.
Market outlook
Supportive factors
Crude stockpile declines and reduced OPEC+ output provide support for prices.
Seasonal demand for heating fuels in the US may boost short-term consumption.
Bearish risks
Elevated US refined product inventories may indicate weaker domestic consumption.
Deflationary pressures in China could dampen global oil demand growth.
Conclusion
Brent crude’s stability above $76 per barrel highlights a balancing act between tighter global supplies and demand-side uncertainties. While seasonal trends and lower output provide support, risks from oversupply in refined products and weak demand from China could cap further gains. Investors will watch for upcoming inventory data and economic developments to gauge future market direction.
US inventory data
Crude stockpiles declined by 1 million barrels, marking the seventh consecutive weekly drop and indicating tighter supply.
Gasoline inventories increased by 6.3 million barrels, while distillate stocks rose by 6.1 million barrels, reflecting weaker demand for refined products.
OPEC and Russian output
OPEC production fell in December after two months of growth, with UAE field maintenance offsetting gains in Nigerian output.
Russian oil output slipped below OPEC+ targets, with exports hitting their lowest level since August 2023, adding to supply concerns.
Demand and seasonal trends
US heating fuel demand is expected to rise with approaching cold weather, offering short-term support to prices.
China’s weak inflation data signaled deflationary pressures and softer domestic demand, raising concerns for global consumption.
Market outlook
Supportive factors
Crude stockpile declines and reduced OPEC+ output provide support for prices.
Seasonal demand for heating fuels in the US may boost short-term consumption.
Bearish risks
Elevated US refined product inventories may indicate weaker domestic consumption.
Deflationary pressures in China could dampen global oil demand growth.
Conclusion
Brent crude’s stability above $76 per barrel highlights a balancing act between tighter global supplies and demand-side uncertainties. While seasonal trends and lower output provide support, risks from oversupply in refined products and weak demand from China could cap further gains. Investors will watch for upcoming inventory data and economic developments to gauge future market direction.