Oil little changed as market weighs mixed drivers

3:39 am Wednesday, November 20th, 2024

By Jeslyn Lerh

SINGAPORE (Reuters) – Oil was broadly stable for a second day on Wednesday as concerns about escalating hostilities in the Ukraine war potentially disrupting oil supply from Russia and signs of growing Chinese crude imports offset data showing U.S. crude stocks rising.

Brent crude futures for January were up 11 cents to $73.42 a barrel at 0730 GMT. U.S. West Texas Intermediate crude futures for December, due to expire on Wednesday, were flat at $69.39 per barrel, while the more active WTI contract for January was up 18 cents at $69.42 per barrel.

The escalating war between major oil producer Russia and Ukraine has kept a floor under the market this week.

“We may expect (Brent) oil prices to stay supported above the $70 level for now, as market participants continue to monitor the geopolitical developments,” said Yeap Jun Rong, market strategist at IG.

On Tuesday, Ukraine used U.S. ATACMS missiles to strike Russian territory for the first time, Moscow said. Russian President Vladimir Putin lowered the bar for a possible nuclear attack.

“This marks a renewed build up in tensions in the Russia-Ukraine war and brings back into focus the risk of supply disruptions in the oil market,” ANZ analysts said in a note to clients.

On the demand side, U.S. crude oil stocks rose by 4.75 million barrels in the week ended Nov. 15, market sources said on Tuesday, citing American Petroleum Institute figures.

That was a bigger build than the 100,000-barrel increase analysts polled by Reuters were expecting.

Gasoline inventories, however, fell by 2.48 million barrels, compared with analysts’ expectations for a 900,000-barrel increase.

Distillate stocks also fell, shedding 688,000 barrels last week, the sources said.

Official government data is due later on Wednesday.

In a boost to oil price sentiment, there were signs that China, the world’s largest crude importer, may have stepped up oil purchases this month after a period of weak imports.

Data from vessel tracker Kpler showed China’s crude imports are on track to end November at or close to record highs, an analyst told Reuters.

Weak imports by China so far this year have pulled down oil prices, with Brent sinking 20% from its April peak of more than $92 a barrel.

(Reporting by Jeslyn Lerh in Singapore; Additional reporting by Laila Kearney in New York; Editing by Sonali Paul and Mark Potter)