Crude Oil Futures Dip Amid Rising US Gasoline Inventories and OPEC+ Uncertainty

Key Highlights

• Crude Prices: Brent at $72.16 (-0.19%), WTI at $68.56 (-0.23%).
• US gasoline inventories increased by 3.3M barrels, raising concerns about demand.
• Iranian crude supply tightened due to US sanctions and fewer shipping options.
• OPEC+ meeting is anticipated to have influence on production decisions and global supply trends.

Crude Oil Prices: A Mixed Bag

• Crude oil futures traded lower on Thursday morning following an increase in gasoline inventory levels in the US for the week ending November 22.
• February Brent oil futures were at $72.16, down by 0.19 percent, and January crude oil futures on WTI (West Texas Intermediate) were at $68.56, down by 0.23 percent.
• December crude oil futures were trading at ₹5,808 on the Multi Commodity Exchange (MCX) during the initial hour of trading on Thursday against the previous close of ₹5,781, up by 0.47 percent, and January futures were trading at ₹5,795 against the previous close of ₹5,769, up by 0.45 percent.

US Inventory Trends Drive Market Sentiment

• The weekly petroleum status report by the US EIA (Energy Information Administration) said that total motor gasoline inventories increased by 3.3 million barrels for the week ending November 22.
• Both finished gasoline and blending components inventories increased last week. Distillate fuel inventories rose by 0.4 million barrels last week.
• As the US heads into the Thanksgiving holiday, an increase in gasoline inventory levels has raised concerns about fuel demand in the US market. The US is a major consumer of crude oil in the global market.
• US commercial crude oil inventories decreased by 1.8 million barrels from the previous week. At 428.4 million barrels, US crude oil inventories were about 5 percent below the five-year average for this time of year.
• Total products supplied in the US over the last four-week period averaged 20.4 million barrels a day, up by 1 percent from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.8 million barrels a day, slightly higher than the same period last year.
• US crude oil imports averaged 6.1 million barrels a day last week, a decrease of 1.6 million barrels a day from the previous week. Over the past four weeks, crude oil imports averaged about 6.6 million barrels a day, 5.5 percent more than the same four-week period last year.

Petroleum News: Iran Sanctions Impact Global Supply Chain

• China’s independent refiners, known as teapots, typically favor cheaper Iranian crude and take around 90 percent of the OPEC producer’s exports. However, a slowdown in the availability of oil has forced a change in buying habits.
• The incoming Trump administration has also led some large processors to back away from Tehran’s crude due to their exposure to US banking, according to Energy Aspects.
• Traders and shippers attribute the scarcity of Iranian supply to the broadening of US sanctions in October, which included more dark fleet tankers involved in the Iran-China trade.
• This move has reduced the number of vessels available for ship-to-ship transfers, tightening supply and driving prices higher.
• Asia's imports of crude oil ticked up slightly in November, led by a recovery by top importer China, but arrivals are still on track to be weaker this year than in 2023.
• The top crude-buying region is forecast to import 26.42 million barrels per day (bpd) in November, up marginally from October's 26.11 million bpd and 26.24 million bpd in September, according to data compiled by LSEG Oil Research.

Expert Opinion on Petroleum Market Trends

• The market is keenly awaiting the outcome of the OPEC+ (Organization of the Petroleum Exporting Countries and allies) meeting on December 1. A Reuters report stated on Wednesday that OPEC+ is likely to further delay the proposed increase in crude oil production output.
• It is notable that OPEC+ had planned to gradually roll back oil production cuts with small increases over many months in 2024 and 2025. Factors such as a slowdown in Chinese and global demand, and rising output outside the OPEC bloc, have dampened that plan.