Crude Oil Market Low, US Gasoline Demand Less Encouraging


Oil prices fell slightly on Thursday under pressure from weaker US gasoline demand and reports of a draft United Nations resolution calling for a cease-fire in Gaza.

Brent crude futures for May fell 17 cents (0.2%) to $85.78 a barrel. Meanwhile, the price of US West Texas Intermediate (WTI) crude oil for May recorded 20 cents (0.3%) to $81.07 per barrel after falling about 1.8% in the previous session.

According to the Energy Information Administration (EIA), crude oil inventories in the United States, the world's largest oil consumer, unexpectedly declined last week.

Additionally, gasoline inventories fell for a seventh week by 3.3 million barrels to 230.8 million. The supply of gasoline products is experiencing a lack of demand and has shrunk below 9 million barrels.

Oil prices were also depressed by confirmation that the US drafted a UN resolution calling for a ceasefire by allowing the release of 40 Israeli hostages in return for hundreds of Palestinians held in Israeli prisons.

Investors also took note of the US central bank's decision to keep interest rates at 5.25% to 5.50% on Wednesday. However, they remain committed to implementing three rate cuts this year.

Ukraine's attack on Russian refineries also prompted investors to trade crude at higher prices as a strike that has disrupted global petroleum supplies.

Ukrainian drones have targeted at least seven Russian refineries this month. The attack has shut down 7% or around 370,500 barrels per day of Russian refining capacity.

According to analysts, prolonged disruptions could force Russian producers to cut supplies if they are unable to export crude due to storage constraints.