(RTTNews) – Crude oil rose on Wednesday as the greenback weakened today amid strong expectations of a rate cut by the US Federal Reserve.
WTI crude oil for January delivery was last seen trading up $0.20 (or 0.34%) at $58.45 a barrel.
In the US, crude oil stockpiles declined by 4.8 million barrels for the week ended Dec. 5, well below expectations for a 1.7 million barrel draw, the third consecutive weekly decline, American Petroleum Institute data yesterday showed.
Crude oil inventories had declined by 2.48 million barrels in the last week.
In the US, crude oil inventories are showing a net increase of only 121,000 barrels for the year.
For the week ended December 5, US crude oil stockpiles fell by 1.812 million barrels after increasing by 0.574 million barrels the previous week, according to the US Energy Information Administration.
For the same period, gasoline inventories increased by 6,397,000 barrels after increasing by 4,518,000 barrels in the previous week.
Similarly, distillate inventories saw an increase of 2.502 million barrels and heating oil inventories increased by 442,000 barrels.
The conflict between Venezuela and America is increasing.
In a new level of tension, yesterday two US fighter planes (F/A-18 Super Hornet) appeared near Maracaibo, Venezuela’s second largest city, before circling over the Gulf of Venezuela for about an hour.
President Donald Trump has been accusing Venezuela of promoting illegal drug trafficking into the US.
Venezuelan President Nicolas Maduro’s days are “counted,” he said in an interview with Politico.
However, Maduro rejected the US allegations and accused Trump of resorting to unfair means to plunder oil reserves in Venezuela. Worth noting is that Venezuela has abundant “heavy” oil with reserves of over 300 billion barrels.
Ukraine and its allies have rejected a US-suggested peace plan to end the Russia-Ukraine war in Europe. Ukrainian President Volodymyr Zelensky said that Ukraine would never cede any territory to Russia.
Zelensky has drafted a revised proposal that he will submit to US negotiators.
On the production front, the eight key OPEC+ members that are ending production cuts increased crude oil output by 160,000 barrels per day in November, according to Argus estimates. The increase means the eight countries have increased output by 2.25 million barrels per day since they began rolling back production cuts on a monthly basis in April 2025.
Low oil prices this year have prompted China to aggressively stockpile its strategic petroleum reserves by 500,000 bpd.
Saad Rahim, chief economist at commodity-trading giant Trafigura, warned as the company announced its results that the oil market faces a “super glut” next year.
Trafigura’s net profit fell to $2.7 billion for the financial year ending in September from $2.8 billion the previous year.
In the US today, markets are almost entirely bullish on a 25-basis-point interest rate cut following the US central bank’s two-day Federal Open Market Committee meeting which ends today.
The US Dollar Index was last seen trading down 0.25 (or 0.25%) today at 98.97.
For the coming week, important market reports are due from the International Energy Agency and OPEC that may provide more clarity on the oil price outlook.
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