Profit booking amid a complicated mix of reasons that included the most recent EIA report, riots in Libya, and growing tensions in the Middle East drove crude oil’s 2.15% spike, which it settled at 6071. According to the EIA Petroleum Status Report, U.S. crude stocks fell by 5.503 million barrels in the week ending December 29, 2023, which was a greater reduction than anticipated.
On the other hand, worries surfaced because the overall amount of product sent to refineries fell by 2.356 million barrels, indicating a drop in demand at that time. Refinery stockpiles unexpectedly surged by 10.9 million barrels, while distillate fuel inventories jumped by 10.09 million barrels, substantially above market expectations.
The Cushing, Oklahoma delivery hub experienced a 706 thousand barrel increase in stocks. As traders balanced supply and demand considerations, these inventory dynamics added to a complex market sentiment.
Production at the El Sahara oil field, which produces about 300,000 barrels per day, was suspended due to protests in Libya over increasing fuel prices. This raised more doubts about possible interruptions to the world’s energy supplies. Open interest is still at 14,660, suggesting that the market is technically experiencing short covering.
