The West Texas Intermediate (WTI) price shows an upward trend, hovering around $72.70 per barrel during the Asian session on Friday. However, WTI experienced a decline due to a surge in US gasoline and distillate inventories, raising concerns about the stability of demand. The significant weekly increase in product stockpiles has sparked worries that US demand might be on a downward trajectory.
Moreover, the Energy Information Administration (EIA) reported that US Crude Oil Stocks Change for the week ending on December 29 declined to 5.503M barrels, more than the forecasted 3.725M barrel decline. However, Crude oil prices received additional support from the Weekly Crude Oil Stock data released by the American Petroleum Institute (API) on Wednesday. The data indicated a significant decline in US Crude stocks by 7.418M barrels, surpassing the market consensus of a 2.967M barrel decrease.
US President Joe Biden's administration is taking a gradual approach to replenishing the Strategic Petroleum Reserve (SPR), following the unprecedented sale of a substantial amount from the emergency stockpile in 2022. The administration has repurchased 13.82M barrels of domestically produced oil.
Crude oil prices experienced an upward surge fueled by escalating tensions in the Israel-Gaza conflict and disruptions at a Libyan oilfield. The Iran-backed Houthis heightened supply concerns by launching two anti-ship ballistic missiles at a container ship in the southern Red Sea en route to Israel. Adding to the volatility, protests on Wednesday led to a complete shutdown of production at Libya's major Sharara oilfield, which can produce up to 300,000 barrels per day (bpd).