Oil Prices Decline Amid Supply Concerns and Geopolitical Tensions

Market Dynamics

Oil prices experienced a decline on Wednesday as concerns about global supply glut intensified following reports of higher US crude inventories. Brent crude futures decreased by 71 cents or 1% to settle at $64.18 per barrel during early trading. Similarly, West Texas Intermediate (WTI) crude futures dropped 63 cents or 1% to $60.11 per barel.

Inventory Build-Up

The American Petroleum Institute reported a 4.45 million barrel increase in US crude stocks for the week ending November 14. This surge in inventories, coupled with 1.55 million barrel rise in gasoline stocks and 577,000 barrel increase in distillate stocks, heightened concerns about potential oversupply in the market.

Geopolitical Counterbalance

Despite these bearish inventory data, the downside was limited by tightening fuel markets resulting from attacks on Russian oil infrastructure. This geopolitical development has contributed to a more balanced supply situation in the fuel segment, partially offsetting the negative impact of rising crude inventories.

Market Outlook

The oil market remains sensitive to both supply dynamics and geopolitical developments. While the recent inventory build in the US has raised concerns about oversupply, ongoing geopolitical tensions continue to provide support to oil prices. The delicate balance between these factors will likely continue to dictate market movements in the near term.