Crude Gains on Stockpile Data, Traders Remain Wary of Oversupply Risks

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Oil prices edged higher in Asian trading on Thursday, supported by data showing a decline in U.S. oil inventories, while traders maintained a cautious outlook for 2025 amid concerns over market oversupply.

As of 20:39 ET (01:39 GMT), Brent crude futures rose 0.7% to $75.13 a barrel, while February WTI crude futures climbed 0.7% to $71.75 a barrel.

U.S. oil inventories fall, boosting crude prices

The American Petroleum Institute (API) reported on Tuesday that U.S. oil inventories dropped by 1.4 million barrels last week, signaling increased demand for crude. Such a decline often spurs buying in oil markets, driving prices higher.

Investors now await the U.S. Energy Information Administration (EIA) report due later Thursday to confirm these figures. Official data from the EIA provides critical insights into U.S. crude supply and demand, shaping market trends and pricing decisions.

Oversupply concerns cloud 2025 outlook

Despite the inventory drop, U.S. oil production remains near record levels. The incoming administration under Donald Trump is expected to implement policies to further boost domestic fossil fuel output.

Meanwhile, the International Energy Agency (IEA) has projected that the oil market will remain well-supplied in 2025, even with a forecasted increase in global demand.

Traders are also closely monitoring China, the world's largest oil importer, as its economic recovery holds the key to demand growth. In a New Year’s address, Chinese President Xi Jinping pledged more proactive measures to stimulate the economy in 2025.

However, concerns persist over rising production from non-OPEC countries and sluggish demand recovery, keeping market participants wary of potential oversupply and its impact on pricing.

 

 

 

 

 

Paraphrasing text from "Investing" all rights reserved by the original author.