WTI holds above $76.50 on US sanctions on Russian oil exports
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WTI price posts modest gains near $76.75 in Wednesday’s early Asian session.
US EIA expected oil demand to steady in 2025 and 2026.
US crude oil inventories dropped by 2.6 million barrels last week, according to the API.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $76.75 on Wednesday. The WTI price edges higher as new US sanctions on Russian oil exports threaten to tighten global supplies. The upside for black gold might be limited after a US government agency forecast steady US oil demand in 2025.
The Biden administration announced new sanctions on Russia's oil sector last week, blacklisting almost 200 vessels from its so-called shadow fleet and targeting the Russian oil producers Gazprom Neft and Surgutneftegas. The mounting concerns over supply disruptions could support the WTI in the near term.
On the other hand, WTI price could face some selling pressure due to global oil production outpacing demand, according to the US Energy Information Administration (EIA) report on Tuesday. The EIA noted that the US's oil demand would remain steady at 20.5 million barrels per day (bpd) in 2025 and 2026, with domestic oil output rising to 13.55 million bpd, an increase from the agency's previous forecast of 13.52 million bpd for this year.
The US crude inventories fell less than expected last week, signalling a weaker demand for WTI price. The API weekly report showed crude oil stockpiles in the United States for the week ending January 10 decreased by 2.6 million barrels, compared to a fall of 4.022 million barrels in the previous week. The market consensus estimated that stocks would decline by 3.5 million barrels.
Later on Wednesday, Oil traders will monitor the US Consumer Price Index (CPI) inflation data for December for fresh impetus. In case of a softer-than-expected outcome, this could drag the Greenback lower and lift the USD-denominated commodity price.
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