Oil Prices Under Pressure: Unexpected Rise in US Gasoline Inventories Causes Uncertainty

Oil prices declined in Asian trading as a surprising increase in U.S. gasoline inventories ahead of the Thanksgiving holiday raised concerns about demand trends. Brent crude fell by 0.1% to $72.79 per barrel, while the price for U.S. West Texas Intermediate slightly dropped to $68.71 per barrel. Due to the U.S. holiday, only limited trading volume was expected. According to the U.S. Energy Information Administration report, gasoline stocks rose by 3.3 million barrels in the week ending November 22, contrary to the expected decrease. Analysts had anticipated a reduction of 46,000 barrels, which was attributed to upcoming record travel activities. The slowed growth in fuel demand in the U.S. and China has significantly weighed on oil prices this year. Although production cuts by OPEC+, which includes Russia and other allies, have limited losses, the market remains uncertain. A possible delay in the production increase planned for January was suggested by OPEC+ representatives on Tuesday. The consortium plans to meet on Sunday to set production policies for early 2025. Previously, the alliance had decided to gradually phase out production cuts over the coming years. Additionally, pressure on oil prices came from the ceasefire between Israel and the Lebanese Hezbollah group. The agreement helped alleviate fears of potential disruptions in oil supplies from the oil-rich Middle East region. Nonetheless, the geopolitical situation remains uncertain, warn analysts from ANZ Bank. Oil price underestimations were noted by commodity analysts at Goldman Sachs and Morgan Stanley, who pointed to a potential risk from new sanctions by the Trump administration against Iran.