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US oil inventories surprise higher as geopolitics keeps crude supported
Key Takeaways (30s Read)
US oil inventories unexpectedly increased, but geopolitical risks continue to support prices.
The delayed weekly inventory report from the US Energy Information Administration revealed unexpected increases in crude, gasoline, and distillate inventories, severely complicating the market already influenced by geopolitical tensions. US crude inventories rose by 405,000 barrels to 424.82 million, contrary to expectations of a 2.4 million-barrel draw. Gasoline stocks increased by 2.9 million barrels to 228.49 million, significantly surpassing a forecast of just a 1.1 million-barrel rise. Distillate inventories saw a slight increase of 202,000 barrels to 118.7 million. Despite these bearish signals, crude prices remained supported due to geopolitical unrest. Brent crude futures rose by $1.30 (2.1%) to $61.94, while US WTI gained $1.34 (2.4%) to close at $58.08. Concerns over prolonged conflict in Ukraine and heightened tensions in Yemen have reignited fears regarding supply disruptions, keeping the market bullish in the face of rising inventories.
AI Analyst
AI Opinion
"The increase in oil inventories reported by the EIA, contrary to market expectations, would typically exert downward pressure on prices. However, the continued geopolitical risks and supply concerns, notably from Ukraine and the Middle East, are providing significant support. Traders need to be aware of the delicate balance between supply dynamics and geopolitical uncertainties. Additionally, strong crude imports from China may further bolster demand in the market. Monitoring the evolving situation will be critical for future trading decisions."
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