Oil futures maintained their positions near five-month highs in Thursday’s European morning trading, as ongoing concerns about global supply disruptions supported prices.
At 0910 GMT, front-month March 2025 ICE Brent futures were priced at $81.82 per barrel, a slight dip from Wednesday’s settlement of $82.03 per barrel, though the market had earlier touched an intraday high of $82.57 per barrel.
Similarly, February 2025 NYMEX WTI futures stood at $79.87 per barrel, compared to the previous day’s close of $80.04 per barrel. The more-liquid March 2025 WTI contract was trading at $78.58 per barrel.
Prices remain buoyed by fears of supply shortages linked to Russian sanctions. Despite Moscow exploring alternative routes for oil exports, widespread disruptions are expected in the global supply chain. Refiners are scrambling to secure feedstock, pushing premiums for Middle Eastern crude to their highest levels in over two years, while some refineries are likely to reduce operations, further tightening the availability of refined products.
Reports from the International Energy Agency (IEA) and OPEC this week provided additional support to the market. The IEA highlighted the risk of severe global supply chain disruptions due to escalating trade tensions, while noting that US sanctions could exacerbate these challenges by tightening crude and product balances. However, the agency maintained a positive outlook for 2025, forecasting a surplus of approximately 750,000 barrels per day (bpd) despite a projected demand increase of 1.05 million bpd.
OPEC also retained its forecast for global oil demand growth in 2025, projecting an increase of 1.45 million bpd. Looking ahead to 2026, the group expects a similar rate of expansion. In its January Monthly Oil Market Report (MOMR), OPEC revised global oil demand for 2025 to 106.63 million bpd, driven by robust economic activity in Asia and non-OECD countries.
US Oil Stocks and Inflation Trends
In the United States, commercial crude oil inventories continued their downward trend, falling by 1.962 million barrels to approximately 412.7 million barrels for the week ending January 10. This marks a 6% decrease from the five-year average for this time of year.
On the other hand, gasoline stocks rose for the ninth consecutive week, reaching their highest level since March 2024, climbing by 5.85 million barrels to 243.6 million. Distillate fuel inventories also saw a build, increasing for the fifth straight week, with a significant rise in the Gulf Coast, pushing nationwide stocks to a one-year high.
Economic data released on Thursday showed US inflation had risen by 2.9% year-on-year in December, in line with forecasts and slightly higher than November’s 2.7%. However, core inflation unexpectedly eased to 3.2%, down from 3.3% in the previous month, raising expectations of a future interest rate cut.
City Index analyst Fiona Cincotta noted, “While the easing in core CPI is positive news for the Federal Reserve after months of elevated inflation, one data point does not mark a new trend.” She added that the Fed will require several more subdued core inflation readings before being convinced that inflation is on a sustainable downward trajectory, as it remains well above the Fed’s 2% target.
