Oil retreats slightly after boost from US crude draw, Russia sanctions
Friday, 17 January 2025
LONDON, Jan 16 (Reuters): Oil prices fell back slightly on Thursday, a day after settling at multi-month highs on the latest US sanctions on Russia and a larger-than-forecast fall in US crude stocks.
Brent crude futures were down 37 cents, or 0.5 per cent, to $81.66 per barrel by 1042 GMT, after rising 2.6 per cent in the previous session to their highest since July 26 last year.
US West Texas Intermediate crude futures slid 35 cents, or 0.4 per cent, to $79.69 a barrel, after gaining 3.3 per cent on Wednesday to their highest since July 19.
US crude oil stocks fell last week to their lowest since April 2022 as exports rose and imports fell, the Energy Information Administration (EIA) said on Wednesday.
The 2 million-barrel draw was more than the 992,000-barrel decline analysts had expected in a Reuters poll.
The drop added to a tightened global supply outlook after the US imposed broader sanctions on Russian oil producers and tankers. The sanctions have sent Moscow's top customers scouring the globe for replacement barrels, while shipping rates have surged too.
The Biden administration on Wednesday imposed hundreds of additional sanctions targeting Russia's military industrial base and evasion schemes.
On Monday, Donald Trump will be sworn in for his second term as US president.
With oil at its current levels, that may lead to clashes with the Organization of the Petroleum Exporting Countries (OPEC) if Trump follows his previous playbook. During his first term he demanded the producer group rein in prices whenever Brent climbed to around $80.
Oil shipping rates extended their rally on Wednesday.
OPEC and its allies, which collectively as OPEC+ have been curtailing output over the past two years, are likely to be cautious about increasing supply despite the recent price rally, said Commodity Context founder Rory Johnston.
"The producer group has had its optimism dashed so frequently over the past year that it is likely to err on the side of caution before beginning the cut-easing process," Johnston said.