Oil prices declined slightly on Thursday, a day after hitting multi-month highs due to the latest US sanctions against Russia and a larger-than-forecast drop in US oil inventories, UNN reports citing Reuters.
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Brent crude oil futures fell 37 cents, or 0.5%, to $81.66 per barrel by 10:42 GMT (12:42 Kyiv time) after rising 2.6% in the previous session to the highest level since July 26 last year.
Futures for WTI crude oil fell 35 cents, or 0.4%, to $79.69 per barrel after rising 3.3% on Wednesday to the highest level since July 19.
US crude oil inventories fell last week to the lowest level since April 2022, as exports rose and imports fell, the Energy Information Administration (EIA) reported on Wednesday.
The 2 million barrel reduction was greater than the 992 thousand barrel drop that analysts had expected in a Reuters poll.
This drop affected the global supply outlook after the US imposed broader sanctions on Russian oil producers and tankers. The sanctions have forced Moscow's largest customers to look for replacements around the world, while shipping rates have also increased.
Given the current oil prices, there may be clashes with the Organization of the Petroleum Exporting Countries (OPEC) if US President-elect Donald Trump follows his previous pattern, the newspaper writes. During his first term, he demanded that the group of producers hold down prices every time Brent rose to about $80.
OPEC and its allies, who together as OPEC+ have been cutting production over the past two years, are likely to be cautious about increasing supplies despite the recent price increases, said Rory Johnston, founder of Commodity Context.
"The producer group's optimism has been dashed so often over the past year that it is likely to shift to caution before it begins the process of mitigating production cuts," Johnston said.
Limiting the rise in oil prices, Israel and Hamas agreed to end hostilities in the Gaza Strip and exchange Israeli hostages for Palestinian prisoners, the official said.
On the demand side, global oil inventories rose by 1.2 million barrels per day in the first two weeks of 2025 compared to the same period a year earlier, slightly below expectations, JPMorgan analysts wrote in a note.
Analysts expect oil demand to grow by 1.4 million barrels per day year-on-year in the coming weeks, driven by increased tourist activity in India, where large-scale festivals are held, as well as travel to celebrate the Lunar New Year in China at the end of January.
Some investors are also expecting a potential interest rate cut by the US Federal Reserve in 2025 following data on declining core inflation in the US, which could support economic activity and energy consumption.