(Bloomberg) -- Oil rose on expectations that US crude inventories declined last week, but gains were capped by the International Energy Agency’s forecast of a large crude glut next year.
West Texas Intermediate climbed near $69 a barrel ahead of a US government report on oil inventories. The industry-funded API expects draws both nationally and at the key Cushing, Okla., storage hub.
Still, the IEA on Thursday warned that the oil market faces a surplus of more than 1 million barrels a day next year, which could swell further if OPEC+ decides to press ahead with supply hikes.
Crude has alternated between weekly gains and losses since mid-October, with traders weighing OPEC+ supply moves, US monetary policy, and the risks to oil-demand growth, especially in China. Oil consumption in the world’s largest importer will grow this year at just 10% of the rate seen in 2023, according to the EIA report.
“The coming weeks will be critical in shaping the near-term outlook for the oil market,” said Ole Hvalbye, an analyst at SEB AB. “The continued strength of the US dollar is exerting downward pressure on commodities overall, while ongoing concerns about demand growth are weighing on the outlook for crude.”
The Middle East was also in focus. Israel was rushing to prepare a cease-fire deal in Lebanon as the government adjusted to the prospect of Trump’s White House return, according to a Washington Post report.
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