Crude oil and gasoline prices fell to 5-week lows on Tuesday due to expectations of increased global oil supplies after the Russia-Ukraine war ends. Weaker-than-expected US economic news negatively impacted energy demand and crude prices. However, a weaker dollar limited losses in crude oil prices.
Tumbling crude prices were attributed to reports that Ukraine accepted a revised peace deal to end the war with Russia. Despite this, Russia has not confirmed acceptance of the agreement. Additionally, recent US economic data, including lower retail sales and private payrolls, contributed to bearish sentiment.
Oil prices received support from reduced crude exports from Russia, with recent data showing a decline in oil product shipments. Geopolitical risks, such as the US military buildup for a potential attack on Venezuela, also bolstered oil prices. Crude oil stored on tankers stationary for over 7 days increased to a 2.25-year high.
OPEC revised its Q3 global oil market estimates from a deficit to a surplus due to higher US production and increased OPEC output. The organization now forecasts a surplus in global oil markets for Q3, compared to a previous deficit estimate. OPEC+ plans to pause production hikes in Q1-2026 to address the emerging global oil surplus.
The EIA expects Wednesday’s weekly crude inventories to decline and gasoline supplies to increase. Last week’s EIA report showed US crude oil inventories below the seasonal 5-year average, along with decreases in gasoline and distillate inventories. US crude oil production slightly decreased from the previous week’s record high.
Active US oil rigs increased slightly last week but remain above the 4-year low set in August. The number of US oil rigs has significantly dropped from levels seen in late 2022. Rich Asplund had no positions in mentioned securities. Information in this article is for informational purposes only and was originally published on Barchart.com.
Read more at Yahoo Finance: Crude Prices Undercut by Signs of Progress to End the Russian-Ukrainian War