Crude oil futures saw a rise on Wednesday morning, following the release of the Energy Information Administration’s (EIA) monthly report, which predicted a decline in global inventories during the first half of 2025.
Brent and WTI Futures Increase
As of 9:56 AM on Wednesday, May Brent oil futures stood at $70.08, up by 0.75%. Meanwhile, April West Texas Intermediate (WTI) crude oil futures were priced at $66.79, up by 0.82%.
Indian Oil Market Shows Similar Trends
In India, March crude oil futures on the Multi Commodity Exchange (MCX) traded at ₹5827, a 0.64% increase from the previous close of ₹5790. April futures were at ₹5821, rising by 0.55% from ₹5789.
EIA Report Indicates Tight Market Until Mid-2025
The EIA’s monthly report forecasted that global oil markets would remain tight through the first half of 2025, with a gradual shift toward oil inventory growth later in the year. The report noted that global oil inventories are expected to fall in the second quarter of 2025, partly due to reduced crude oil production in Iran and Venezuela.
Price Forecasts and Future Expectations
The EIA expects Brent crude oil prices to rise from around $70 per barrel to $75 per barrel by the third quarter of 2025. However, the report predicts that oil inventories will start to build up again by late 2025, putting downward pressure on prices. The anticipated increase in non-OPEC oil production and OPEC+ production cuts will likely lead to a decline in prices, with Brent crude potentially averaging $68 per barrel in 2026.
Analysts Discuss Market Trends
Warren Patterson, Head of Commodities Strategy at ING Think, and Ewa Manthey, a Commodities Strategist, noted that oil prices were supported by a weaker US dollar on Tuesday. They also pointed out that the oil market largely ignored the ongoing negotiations regarding the US-brokered ceasefire in Ukraine, with uncertainties surrounding Russia’s stance on the agreement.
API Data Shows Bearish Signals
The American Petroleum Institute’s (API) data indicated an increase of 4.2 million barrels in US crude oil inventories, surpassing the market’s expected 2 million barrels build. However, declines in Cushing crude oil inventories and gasoline stocks somewhat offset the bearish signals. Cushing inventories fell by 1.2 million barrels, while gasoline stocks dropped by 4.6 million barrels. Distillate stocks saw a modest increase of 400,000 barrels.
Natural Gas and Other Commodities
March natural gas futures on the MCX were trading at ₹379.60, down 2.67% from the previous close of ₹390. On the National Commodities and Derivatives Exchange (NCDEX), April dhaniya contracts were priced at ₹7890, a 0.38% increase from ₹7860. Meanwhile, April cottonseed oilcake futures on NCDEX traded at ₹2710, down 0.11% from the previous close of ₹2713.
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