Oil Prices Rise Slightly in Asia

Oil prices experienced a modest increase during Asian trading on Thursday, supported by a larger-than-expected draw in U.S. inventories and heightened geopolitical tensions in the Middle East.

However, overall gains were restrained by increases in U.S. product inventories. Traders remained cautious ahead of an OPEC+ meeting later in the day, which is anticipated to provide further insights on supply dynamics.

Brent oil futures expiring in February rose by 0.1%, reaching $72.37 a barrel, while West Texas Intermediate crude futures increased by 0.2%, hitting $68.32 a barrel by 20:57 ET (01:57 GMT).

Oil markets have seen some gains this week as the Israel-Hezbollah ceasefire remains tenuous, with reports from both sides indicating violations. Israel has threatened to intensify its offensive against Hezbollah and Lebanon if the ceasefire fails.

OPEC+ Meeting Awaited for Supply Cues

The Organization of Petroleum Exporting Countries and allies (OPEC+) is scheduled to convene later on Thursday, with recent reports indicating that the group may further postpone plans to boost production.

OPEC+ had previously cut production by over 2 million barrels in the last two years and is expected to maintain cuts at least until the second quarter of 2025. The group aims to keep supply limited due to concerns over declining oil demand, particularly in China's market.

OPEC+ has regularly revised its forecasts for global demand growth in 2024 and 2025, citing uncertainty surrounding a prolonged economic recovery in China. Nevertheless, sentiment regarding demand has improved recently, as signs of economic resilience emerge in the U.S.

Expansionary policies introduced by President-elect Donald Trump are also predicted to stimulate fuel demand.

U.S. Oil Inventories Fall, but Products Rise

Government data released Wednesday revealed a larger-than-expected decline of 5.07 million barrels in U.S. oil inventories for the final week of November.

However, gasoline and distillate stockpiles increased, suggesting that overall fuel demand remains subdued in the world's largest fuel consumer.

While demand for heating fuels is expected to rise during the winter season, a decrease in travel activity is likely to result in lower overall oil demand.