December 19, 2024
There was a decline in oil prices in global commodities market as the US dollar rose above its two-year high following the Fed’s rate cut. Brent dropped to $72 per barrel while US WTI came down to below $69 per barrel, Fed funds rates cut indicated that dollar gain overshadowed 25 basis points.
ING in a note said, the Federal Reserve lowered rates by 25 bp as expected but trimmed its rate-cut expectations for 2025, and this has weighed on the commodities complex.
In a report monitored on market force, Crude oil prices dipped as the U.S. dollar surged to its highest level in more than two years, following expectations for fewer interest rate cuts from the Federal Reserve next year. Also, a soft weekly oil inventory report from the Energy information Administration, EIA, added to downward pressure on the oil market
US weekly inventory numbers from the EIA on Wednesday showed that commercial crude oil inventories (excluding SPR) decreased by 0.9 million barrels for the week ended on 13 December 2024.
This was below the market expectations of a decline of about 1.6 million barrels, according to ING note. Analysts stated that the draw was also smaller than the 4.7 million barrel draw the American Petroleum Institute, reported on Tuesday.
ING reported in it note that, “When factoring in the SPR, the draw was even smaller, with total US crude oil inventories falling by just 0.4 million barrels,”
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Total US commercial crude oil stocks stand at 421 million barrels, that’s 6% below the five-year average. Oil inventories at Cushing, Oklahoma, rose 108k barrels to 23m barrels after dropping to their lowest level since late September over the preceding week.
Crude oil imports increased by 0.67 million bbls/d last week to 6.65 million bbls/d, while exports strengthened by 1.8 million bbls/d to 4.9 million bbls/d (the highest since the end of July) over the reporting week.
In refined products, stocks of gasoline increased by 2.35 million barrels, against a forecast for a build of 1.44 million barrels. However, distillate fuel oil stockpiles fell by 3.2 million barrels last week, in contrast to the market speculation of a build of about 1 million barrels
