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Oil prices changed little in early Asia trading on Wednesday. Brent crude dropped slightly by 2 cents to $73.60 per barrel, and U.S. West Texas Intermediate (WTI) crude fell by 3 cents to $69.91.
Picture: WTI crude sees a 2.60% rise, closing at $69.92 after hitting a high of $70.06, as seen on the VT Markets app.
This follows Tuesday’s strong 2.5% rally in Brent, which marked its biggest gain in two weeks. While the market showed signs of optimism, prices were flat as traders weighed up the latest inventory data from the U.S. and upcoming OPEC+ decisions.
Data from the American Petroleum Institute (API) showed that U.S. crude inventories rose by 1.2 million barrels last week. Gasoline stocks also increased by 4.6 million barrels, surprising many, especially considering the Thanksgiving holiday when demand for fuel usually spikes.
This has raised some concerns about softening demand, although the official figures from the U.S. Energy Information Administration (EIA) is expected to provide more clarity.
Despite the inventory build-up, oil prices are being supported by expectations that OPEC+ will extend its supply cuts when the group meets on Thursday.
This could help tighten global supply and offer more price support in the coming months. OPEC+ has been trying to balance oil supply with slower demand growth, and an extension of cuts could keep the market bullish for a while longer.
Beyond the numbers, global tensions are adding to uncertainties. Tensions between Israel and Hezbollah are rising, and there’s also concern about the ongoing conflict in Syria. These risks could affect oil production in the region, adding a layer of uncertainty to global supply.
In the short term, oil prices are likely to remain in a tight range as traders wait for more direction from both inventory data and OPEC+.
If the situation in the Middle East worsens, or if OPEC+ decides to deepen the cuts, we could see prices move higher. For now, the market is cautious, but underlying bullish factors are still very much in play.
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