US Crude Oil Inventories Decline Amidst Middle East Tensions

In its weekly petroleum report released on Wednesday, the US Energy Information Administration (EIA) stated that US crude oil inventories decreased by 6.4 million barrels to 453.6 million barrels for the week ending April 19. The report also noted that crude oil production remained stable at 13.1 million barrels per day (b/d). Additionally, there was a slight decline in crude oil imports, which fell by 51,000 b/d to 6.5 million b/d, while exports increased by 250,000 b/d to 4.2 million b/d.

Concerns regarding US fuel demand have intensified due to a cooling in business activity in April, coupled with stronger-than-expected inflation and employment data, suggesting that the Federal Reserve may postpone anticipated interest rate cuts.

Tensions in the Middle East are escalating, with potential conflict expansion in the Gaza Strip where Israel may initiate an assault on Rafah, potentially heightening the risk of a broader conflict that could disrupt global oil supplies. Despite these developments, there have been no impacts on oil supply yet, nor have there been any recent signs of direct conflict between Israel and Iran, a major oil producer and backer of Hamas, since last week.