WTI edges lower to near $76.50 despite tighter supply concerns, declining US stockpiles

• WTI price depreciates despite growing concerns over potential supply disruptions triggered by new US sanctions targeting Russian Oil.
• API Weekly Crude Oil Stock declined by 2.6 million barrels in the previous week, below the expected 3.5 million barrel reduction.
• US EIA suggested that Oil prices are expected to face downward pressure over the next two years.

West Texas Intermediate (WTI) Oil price remains in the negative territory for the second successive day, trading around $76.60 per barrel during the European session on Wednesday. However, crude Oil prices could recover as tighter supply concerns and declining US stockpiles.

Oil prices may continue to rise amid heightened concerns over potential supply disruptions driven by new US sanctions on Russian Oil revenue. On Friday, the US Treasury imposed broader sanctions targeting Russian Oil producers Gazprom Neft and Surgutneftegas, along with 183 vessels involved in transporting Russian Oil.

Additionally, American Petroleum Institute (API) data reported a 2.6 million barrel drop in US crude inventories for the week ending January 10, below the anticipated 3.5 million barrel reduction. This follows a previous decline of 4.022 million barrels. The EIA Crude Oil Stocks Change report, scheduled for release later in the North American session, is also expected to show a 3.5 million barrel decline for the prior week.

US Energy Information Administration (EIA) suggested in its Short-Term Energy Outlook report released on Tuesday that Oil prices are expected to face downward pressure over the next two years as global production growth surpasses demand. Many analysts anticipate an oversupplied Oil market in 2025, following a sharp slowdown in demand growth in 2024, particularly in the largest energy-consuming nations, the US and China, per Reuters.

The EIA now projects global Oil and liquid fuel production to average 104.4 million barrels per day (bpd) in 2025, up from its previous forecast of 104.2 million bpd. In contrast, global Oil demand is expected to average 104.1 million bpd, down from the earlier estimate of 104.3 million bpd and still below pre-pandemic trends, the EIA noted.