Oil futures edged lower early Thursday, feeling continued pressure after data released during the previous session showed a sharp rise in U.S. crude inventories over the past two weeks.
Price action
-
West Texas Intermediate crude
CL00,
-0.35%
for December delivery
CL.1,
-0.35% CLZ23,
-0.35%
fell 21 cents, or 0.3%, to $76.45 a barrel on the New York Mercantile Exchange. -
January Brent crude
BRN00,
-0.37% BRNF24,
-0.37% ,
the global benchmark, was down 23 cents, or 0.3%, at $80.95 a barrel on ICE Futures Europe.
Market drivers
The Energy Information Administration on Wednesday released two weeks of U.S. petroleum supply data, after having delayed last week’s numbers due to planned system updates.
The government agency reported that U.S. commercial crude inventories rose by 3.6 million barrels for the week ended Nov. 10 to total 439.4 million barrels. The data showed inventories rose 13.9 million barrels the previous week, for a two-week rise of 17.5 million barrels. On average, analysts polled by S&P Global Commodity Insights expected the report to show an increase of 4.5 million barrels for the two weeks ending Nov. 10.
At 439.4 million barrels, crude stocks are below the five-year average but are trending back toward more typical levels for this time of year, noted ING commodity analysts Warren Patterson and Ewa Manthey.
Meanwhile, Amos Hochstein, a White House energy adviser, told Bloomberg on Wednesday that the U.S. would enforce sanctions against Iran and that the country’s crude exports “will come down.”
Lax enforcement of the sanctions has been seen allowing Iranian crude exports to grow. Fears the Israel-Hamas war could widen, threatening Iranian exports, contributed to a temporary jump in crude prices last month, though the “risk premium” around the war was wiped away by the end of the month.
Stricter enforcement of sanctions could take 500,000 to 1 million barrels a day of crude off the market, Patterson and Manthey said, “enough to tighten up the global oil balance significantly through 2024.”
The decline would be partly offset by a marginal rise in Venezuelan supplies after the U.S. eased sanctions, as well as the potential restart of Kurdish oil flows that could bring around 500,000 barrels a day back onto the market, the analysts said.
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