Crude oil and gasoline prices declined sharply, with December WTI crude futures falling 4.15% to a three-week low. December RBOB gasoline also dropped 3.48%, reaching its lowest level in three months.
The decline followed comments from US President Donald Trump, who played down the possibility of immediate military strikes against Iran. His remarks eased concerns about further escalation in the US-Iran conflict. Oil prices also faced pressure after US crude inventories recorded a smaller-than-expected decline, while stockpiles at the Cushing storage hub increased.
Meanwhile, higher Saudi oil production and record US crude output added to concerns about supply. However, geopolitical risks, disruptions to Russian energy infrastructure and declining US fuel inventories continue to influence market sentiment.
The latest EIA report showed that US crude inventories fell by 865,000 barrels, below market expectations of a 1.7-million-barrel decline. Gasoline stocks unexpectedly decreased by 222,000 barrels, while distillate inventories dropped by 3.57 million barrels to their lowest level in 23 years.
US crude production also reached a record 14.003 million barrels per day. Additionally, active US oil rigs increased by two to 462, matching a recent 1.5-year high.
Overall, easing geopolitical concerns and rising crude supply weighed on oil prices. However, tight fuel inventories and ongoing supply disruptions could continue to create volatility in the energy market.
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