Oil Prices Strong Despite a Surprise Increase in U.S. Crude Inventories
Crude oil prices defy bearish signals, rise 2.98%; global concerns countered by geopolitical tensions.
Crude oil prices maintained a positive trend before Christmas, up 2.98% week-over-week, demonstrating resilience against global forces that could potentially dampen market sentiment. The U.S. Energy Information Administration (EIA) indeed announced on Wednesday that U.S. crude inventories rose by 2.9 million barrels for the week ended Dec. 15, compared with expectations for a 2.3 million barrel drop, raising concerns about demand from the world’s largest consumer. The EIA also said U.S. crude output rose to a record 13.3 million barrels per day, up from the prior all-time high of 13.2 million barrels.
Another shake-up looms over global oil markets: Angola's exit from OPEC. The country had recently publicized its displeasure towards OPEC+'s decision to reduce output in 2024. Angola will quit the OPEC with effect from January 1, 2024, leaving it with 12 members and crude oil production of about 26% of the world market.
Despite these bearish factors, oil prices rose over the week ended Dec. 22, in the wake of the Houthis’ attacks on commercial vessels near Bab al-Mandeb in the Red Sea. As a direct consequence of these assaults, the biggest shipping and oil companies have suspended transit through the Suez Canal, one of the world’s most important maritime trade routes, rerouting ships around the Cape of Good Hope.
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Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.
