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WTI Crude Oil Steady Near $69.50, Limited Downside Due to Rising US Oil Demand

WTI Crude Oil Steady Near $69.50, Limited Downside Due

WTI Crude Oil Steady Near $69.50, Limited Downside Due to Rising US Oil Demand

West Texas Intermediate (WTI) crude oil prices remained subdued, hovering near $69.60 per barrel during Thursday’s Asian session. However, the downside appears limited as strong US fuel demand and shrinking stockpiles provide support. The US Energy Information Administration (EIA) reported a notable decrease in crude oil inventories, with stockpiles dropping by 4.471 million barrels for the week ending September 20, significantly exceeding the expected decline of 1.2 million barrels.

Crude prices dipped on Wednesday as concerns about supply disruptions in Libya eased. According to Reuters, delegates from Libya’s east and west reached an agreement on the process to appoint a central bank governor, a critical step toward resolving the conflict over control of the country’s oil revenue, which has previously hindered exports.

Despite these factors, oil prices continue to face headwinds. Traders are reassessing the potential impact of China’s economic stimulus on global oil demand. Earlier this week, People’s Bank of China (PBOC) Governor Pan Gongsheng announced a reduction in the Reserve Requirement Ratio (RRR) by 50 basis points and lowered the seven-day repo rate from 1.7% to 1.5%. These measures are part of broader efforts to inject capital into the economy, with reports suggesting China may inject an additional USD 142 billion into its top banks. However, the effectiveness of these measures in boosting demand from China, the world’s largest oil importer, remains uncertain.

On the geopolitical front, tensions in the Middle East are also influencing oil prices. An Israeli airstrike in Beirut killed a senior Hezbollah commander, raising fears of a broader regional conflict as cross-border rocket attacks continue. Meanwhile, the US, France, and other allies have called for a 21-day ceasefire along the Israel-Lebanon border “Blue Line” and have expressed support for a ceasefire in Gaza, following discussions at the United Nations. These developments could limit the downside for oil prices as the potential for broader instability in the region looms.

In summary, while WTI crude remains subdued near $69.50, increased US demand and geopolitical risks could help maintain a floor under prices, preventing a significant decline in the near term.