Oil Prices Trend Down on Lower Tensions, Despite Draw in EIA Crude Inventories

Oil prices were trading above $71 on Monday, but resumed the bearish trend after the ceasefire in the Middle East and the EIA inventory drawdown this week couldn’t change the downward momentum.

WTI crude oil experienced a 3% decline on Monday, driven by news of a potential ceasefire between Israel and Lebanon, which improved the sentiment as it could ease concerns about supply disruptions from the Middle East. Aside from that, there are potentially significant geopolitical implications for how the war in Ukraine may finish. According to a Reuters source, Trump would appoint Keith Kellogg as envoy to end the war, which is again another negative for oil prices.

Meanwhile, reports from Reuters suggest that OPEC+ is considering further delaying its planned production increase originally scheduled for January. The group is currently withholding over 6 million barrels of output per day, with indications last week pointing to a potential postponement until the first quarter of next year.

WTI Oil Chart Daily – The Highs Keep Getting Lower

However, there remains the possibility that OPEC could abandon its current stance and engage in a market share battle. Such a move could lead to a breakdown of critical support levels, with prices falling below $67 and potentially testing $65, considered a key threshold for WTI crude. As of now, WTI crude is trading near the day’s lows, down $0.80 at $68.40, despite significant reductions in EIA crude oil inventories.

Weekly US EIA Oil Inventory Data (Week Ending Nov 22)

• Crude Oil Inventories: -1,844K (vs. -605K expected)
• Gasoline Inventories: +3,314K (vs. -46K expected)
• Distillate Inventories: +416K (vs. -103K expected)
• Refinery Utilization: +0.3% (vs. +0.4% expected)
• Crude Oil Production: 13.49 mbpd (up from 13.2 mbpd)

API Private Oil Inventory Data (Reported Yesterday):

• Crude Oil Inventories: -5,939K
• Gasoline Inventories: +1,814K
• Distillate Inventories: +2,543K

US WTI Crude Oil Live Chart

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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