By Georgina McCartney
HOUSTON (Reuters) – Oil prices settled lower on Wednesday after crude and gasoline stocks rose by more than expected last week, but losses were capped by worries about the intensifying war between major oil producer Russia and Ukraine.
Crude oil futures for January settled down 50 cents, or 0.68%, at $72.81. U.S. West Texas Intermediate crude futures for December expired on Wednesday and settled down 52 cents, or 0.75%, at $68.87, while the more active WTI contract for January settled down 49 cents, or 0.71% at $68.75.
U.S. crude and gasoline stocks rose by more than expected last week, according to data from the Energy Information Administration, which weighed on prices.
Fears of future oil supply disruptions due to the ongoing conflict between Russia and Ukraine helped support prices despite the increase in stockpiles. Geopolitical tensions escalated as Ukraine fired missiles into Russia, adding to market uncertainty.
Despite the geopolitical risks, long positions in WTI have declined significantly, with hedge funds holding only 50% of summer levels, per CFTC data. The market remains nervous about potential supply disruptions, especially in the Middle East.
Global supply could face further constraints as OPEC+ considers delaying output increases due to weak global oil demand. This decision could be made at the upcoming OPEC+ meeting on Dec. 1, according to sources familiar with the discussions.
Overall, while concerns about rising stockpiles and weak demand persist, geopolitical tensions and the potential for supply disruptions are keeping oil prices supported in the face of uncertainty.