Oil prices saw a modest increase on Thursday, with Brent crude rising 0.2 per cent to $72.97 and U.S. West Texas Intermediate up 0.23 per cent to $68.91.
The rise was driven by geopolitical tensions between Russia and Ukraine, which offset the impact of a larger-than-expected increase in U.S. crude inventories, according to Reuters.
“For oil, the risk is if Ukraine targets Russian energy infrastructure, while the other risk is uncertainty over how Russia responds to these attacks,” said ING analysts in a note.
JPMorgan analysts reported that oil consumption has rebounded in the past week, driven by stronger travel demand in the U.S. and India, with India also seeing a notable rise in industrial demand.
Global oil demand is estimated to hit 103.6 million barrels per day (bpd) during the first 19 days of November, marking an increase of 1.7 million bpd compared to the same period last year.
The gains in oil prices were partially offset by a larger-than-expected increase in U.S. crude inventories, which rose by 545,000 barrels to 430.3 million barrels for the week ending November 15. This exceeded analysts’ forecast of a 138,000-barrel increase.
Additionally, gasoline inventories rose more than expected, while distillate stockpiles saw a larger-than-anticipated draw, according to Energy Information Administration data.
Increased supply also played a role, with Norway’s Equinor announcing it had restored full output capacity at the Johan Sverdrup oilfield in the North Sea after a power outage.
Furthermore, OPEC+ may delay planned output increases when it meets on December 1, as three sources familiar with the discussions suggested, citing weak global oil demand as a key concern.
OPEC+, responsible for around half of the world’s oil production, had initially aimed to gradually unwind production cuts with small increases over several months in 2024 and 2025.
However, due to concerns about weak global oil demand, the group may reconsider these plans.
