U.S. crude stockpiles drop 8.6 million barrels to 415.6 million
Oil prices fell Friday as traders weighed plans to accelerate emergency oil-stock releases against persistent Middle East supply risks and uncertainty over shipping through the Strait of Hormuz. December Brent crude futures dropped 0.9% to $105.00 a barrel, and December West Texas Intermediate futures fell 1.0% to $95.55 a barrel.
The International Energy Agency said Thursday that its members agreed to accelerate the release of around 100 million barrels of previously pledged emergency oil stocks, including more than 20 million barrels of diesel to be released as soon as possible. About 330 million barrels have already been released, the agency said, and total releases would exceed the 400 million barrels initially agreed upon in March, with some members contributing additional volumes.
Despite recovering Middle East oil flows, uncertainty surrounding the conflict continues to support crude prices, analysts at ING said. The bank said a sustained recovery in shipments through the Strait of Hormuz could gradually reduce the geopolitical risk premium, but a U.S.-Iran agreement would be needed to give markets greater confidence that higher flows could be maintained.
Oil markets were also assessing U.S. inventory data released Thursday, which showed commercial crude stockpiles fell by 8.6 million barrels to 415.6 million barrels last week, according to the Energy Information Administration. Distillate inventories dropped by 2.5 million barrels and remained 12% below their five-year average.
Analysts at ING said the inventory draw partly reflected hurricane-related production disruptions and lower crude imports. U.S. crude futures had risen Thursday following the sharp decline in inventories, while Brent settled slightly lower that day.
Shipping risks remained elevated. Two cargo ships sank near the Strait of Hormuz following attacks, The Wall Street Journal reported. U.K. Maritime Trade Operations separately reported Wednesday that two container ships were struck by unidentified projectiles while transiting the waterway.