Oil Prices Stabilize Amidst Increased US Stockpiles and Ukraine Tensions

Highlights:

• US Crude Stockpiles Rise: US crude inventories increased by 545,000 barrels last week, though this was lower than expected, while petrol inventories surged by 2.05 million barrels.
• Geopolitical Tensions Impacting Oil: The war in Ukraine continues to influence oil markets, with Ukrainian forces intensifying the use of Western-supplied long-range weapons, heightening supply concerns.
• Cushing Storage Hub Data: Crude stockpiles at the Cushing, Oklahoma storage hub fell by 140,000 barrels, adding complexity to the oil supply situation.

Oil prices remained steady at the time of writing as US crude inventories rose for the third consecutive week, while traders kept a close eye on the intensifying conflict in Ukraine. West Texas Intermediate (WTI) crude hovered around $US69 per barrel, following a 0.7% drop on Wednesday (Thursday AEDT), while Brent crude settled just under $US73 per barrel.

US Crude Stockpiles Increase

According to government data, US crude stockpiles increased by 545,000 barrels last week, which was significantly lower than the figures predicted by an industry report. Despite this increase, the overall market sentiment remains cautious, as traders weigh the broader implications of supply concerns and a strengthening dollar. In addition, petrol inventories surged by 2.05 million barrels, further impacting the supply dynamics.

Ongoing Geopolitical Tensions

The market also remains volatile due to geopolitical concerns, particularly the ongoing war in Ukraine. Ukrainian forces have been increasing the use of Western-provided long-range weapons, which is contributing to growing uncertainty about global oil supplies. The escalation of the conflict is amplifying risks, with potential disruptions to Russian oil exports remaining a key concern.

Storage Hub Activity

At the Cushing, Oklahoma storage hub, crude stockpiles fell by 140,000 barrels, according to the Energy Information Administration. While the decrease is relatively minor, it adds to the complexity of the supply landscape, keeping traders on edge as they monitor both domestic and global developments.

Overall, the oil market is in a delicate balance, influenced by supply data and geopolitical factors, particularly the ongoing conflict in Ukraine.

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