Crude oil futures traded higher on Wednesday morning after US EIA’s (Energy Information Administration) monthly report forecasted a decline in global inventories during the first half of 2025.
At 9.56 am on Wednesday, May Brent oil futures were at $70.08, up by 0.75 per cent, and April crude oil futures on WTI (West Texas Intermediate) were at $66.79, up by 0.82 per cent.
March crude oil futures were trading at ₹5827 on Multi Commodity Exchange (MCX) during the initial hour of trading on Wednesday against the previous close of ₹5790, up by 0.64 per cent, and April futures were trading at ₹5821 against the previous close of ₹5789, up by 0.55 per cent.
The EIA’s monthly report said that global oil markets will remain relatively tight through the middle of 2025 before gradually shifting to oil inventory builds later this year. “We expect global oil inventories will fall in the second quarter of 2025 in part due to decreasing crude oil production in Iran and Venezuela,” the report said.
As a result, the Brent crude oil spot price in EIA’s forecast rises from about $70 per barrel to $75 per barrel by the third quarter of 2025. However, the report expected that oil inventories will build and place downward pressure on crude oil prices in late-2025 and through 2026 when OPEC+ unwinds production cuts and non-OPEC oil production grows. “As a result, we forecast the Brent crude oil price will fall to an average of $68 per barrel in 2026,” the report said.
In their Commodities Feed for Wednesday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said oil prices managed to settle higher on Tuesday, supported by the weaker US dollar. The oil market seems to be largely ignoring Ukraine agreeing to a US-brokered ceasefire. There is still uncertainty over where Russia stands on the proposed agreement, they said.
Referring to the data released by the American Petroleum Institute (API), they said API were fairly bearish. US crude oil inventories increased by 4.2 million barrels over the last week, well above the roughly 2 million barrels build the market expected. Draws in Cushing crude oil inventories and gasoline stocks offset some of the bearishness, falling 1.2 million barrels and 4.6 million barrels, respectively. Meanwhile, distillate stocks grew by 400,000 barrels, they said.
March natural gas futures were trading at ₹379.60 on MCX during the initial hour of trading on Wednesday against the previous close of ₹390, down by 2.67 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), April dhaniya contracts were trading at ₹7890 in the initial hour of trading on Wednesday against the previous close of ₹7860, up by 0.38 per cent.
April cottonseed oilcake futures were trading at ₹2710 on NCDEX in the initial hour of trading on Wednesday against the previous close of ₹2713, down by 0.11 per cent.
