- Oil prices remain slightly positive amid rising Asia’s demand.
- OPEC+ is expected to increase output, for the first time since 2022.
- Inventory data shows shrinkage, posing an upside risk for oil prices.
Crude oil prices remained steady on Thursday as US inventory and geopolitical worries were offset by rising Asian demand. Brent crude futures lost 11 cents, while WTI May contracts lost 12 cents.
Asia’s crude oil demand, which was previously sour, is now set to recover as refiners resume operations after the maintenance. Moreover, Exxon Mobil is about to complete its upgrade of the Singapore refinery, which is anticipated to consume heavily Middle Eastern oil. Chinese refinery also looks positive, picking up pace after a slow start of the year. April’s crude processing of about 1.8 mn will be offline, dropping to 1.2 mn in May.
Dubai crude, which is a benchmark of the Middle East, has risen above Brent, signaling a surge in demand for medium sour crude. SEB analyst Bjarne Schieldrop said, “The strength in medium sour crude is a key driver of the global market right now.” Meanwhile, Saudi Arabia reduced oil prices to Asia for the first time in over three months, which shows easing supply concerns.
The US government data revealed a bigger draw in distillate inventories, which includes heating oil and diesel, falling by 2.8 mn barrels. However, crude stock inventory rose by 2.7 mn barrels, exceeding the market forecast. Despite this, the crude oil forecast by JPMorgan remains positive, anticipating stable consumption trends.
Today’s strength of the US dollar puts slight pressure on oil prices, making oil expensive for foreign buyers. The FOMC kept interest rates steady and affirmed two rate cuts in 2025, which added to the market’s cautiousness.
Geopolitics still holds much importance when it comes to crude oil prices. The renewed Middle East tension amid Israel’s ground operation in Gaza, breaking the two months of ceasefire, has ignited fresh concerns about the crude oil supply. Meanwhile, OPEC+ is expected to increase output by 138k bpd in April. This will be the first output increase since 2022. Though the decision will ease supply, the prices may tumble if demand can’t keep pace.
