Oil & Gas

Oil prices continued their upward streak on Thursday, closing higher for the third consecutive day. Brent futures settled at $76.48 per barrel, rising by 0.58%, while US West Texas Intermediate (WTI) crude for March delivery increased to $72.57 per barrel. The more actively traded April WTI contract also saw a modest gain of 0.35%, reaching $72.50 per barrel. These price increases were driven by declining fuel inventories in the US and concerns over potential disruptions in Russian oil supply.

The Energy Information Administration (EIA) reported a larger-than-expected rise in US crude oil stockpiles, but fuel inventories saw a decline due to seasonal refinery maintenance. "The crude build was a bit larger than expected, but there was a modest draw in gasoline and a larger draw in distillate, keeping total inventories flat," said Giovanni Staunovo, an analyst with UBS. Following the report, crude futures extended their gains, reflecting market confidence in sustained demand and tightening fuel supply.

Geopolitical tensions further fueled concerns about oil supply stability. Russia attacked Ukrainian gas infrastructure, damaging production facilities, while a Ukrainian drone strike disrupted Caspian Pipeline Consortium oil flows, reducing exports from Kazakhstan by 30-40%. Meanwhile, Turkey, which operates the Ceyhan port that ships Iraqi Kurdistan oil, had not yet received confirmation on the resumption of those exports. Analysts at ING noted that if Iraqi oil flows resumed, an additional 300,000 barrels per day would enter the market, partially offsetting supply risks.

Beyond supply issues, economic uncertainties also weighed on oil prices. Trade tariffs introduced by former US President Donald Trump’s administration raised concerns about weakening global demand, which could reduce fuel consumption. Analysts highlighted potential risks to European and Chinese demand, further limiting price gains. "It is natural to be concerned about the global economic outlook as Donald Trump takes a sledgehammer smashing away at the existing global 'free-trade structure,'" said Bjarne Schieldrop, chief commodities analyst at SEB. While oil prices have risen on supply concerns, market uncertainties surrounding trade and economic growth continue to shape the outlook.