OPEC Talks: Saudi Arabia's energy minister, Prince Abdulaziz bin Salman, held talks with counterparts from Iraq, Libya, and the UAE ahead of the Feb. 3 OPEC+ meeting, discussing cooperation to stabilize global energy markets. Despite U.S. President Donald Trump's call for lower oil prices, OPEC+ is unlikely to adjust its plan to raise output from April, according to multiple delegates. Oil prices, which peaked at nearly $83 per barrel earlier this year, have since eased, while OPEC+ remains cautious about market stability and continues to withhold significant production to support the market.
Libya Protests: Protests at Libya's Es Sider and Ras Lanuf ports on Tuesday temporarily raised concerns about potential disruptions to 450,000 barrels per day of crude oil exports. However, Libya's state-run National Oil Corp confirmed that export operations were running normally after engaging in talks with the protesters. While the immediate threat has subsided, analysts warn of the potential for further disruptions in the future, keeping the market on alert.
API Stats: U.S. crude and gasoline stockpiles are expected to have risen last week, while distillate inventories declined, according to a Reuters poll. Analysts estimate crude stocks increased by about 3.2 million barrels, gasoline by 1.3 million barrels, and distillates fell by 2.3 million barrels, with refinery activity also slowing slightly. The official DOE report, which will provide the final numbers, is set to be released later this morning at 9:30 am CST.
Market Overview: Oil prices dipped Wednesday morning following an estimated rise in U.S. crude stockpiles and the resumption of Libyan exports, easing immediate supply concerns. Market attention also turned to the impact of impending U.S. tariffs on Canadian and Mexican imports, with analysts suggesting they could influence U.S. crude prices in the coming days. Meanwhile, expectations that OPEC+ will maintain its planned production increase from April added further clarity to the supply outlook. Investors are now awaiting the EIA's weekly report for confirmation of inventory trends and further market direction.
Russian Oil Sanctions Impact
Russian oil trade with Asia has faced disruptions due to new U.S. sanctions, causing tanker freight rates to surge and leading to delays in offloading cargo in China. Several sanctioned tankers, such as the Huihai Pacific and Viktor Titov, are waiting off the coasts of Tianjin and Qingdao, while others have faced weeks-long delays to discharge cargo at Chinese ports. In India, refiners have reported reduced offers for Russian crude and are turning to alternative suppliers from the Middle East, Africa, and the U.S. The sanctions, targeting tankers carrying a significant portion of Russia’s seaborne oil exports, are expected to tighten Russian crude availability further in both China and India.
Oil prices fell on Wednesday, with WTI crude settling at its lowest price of the year after domestic stockpiles rose more than expected. WTI crude dropped 1.6%, settling at $72.62, following a 3.46 million barrel increase in U.S. crude inventories, higher than the 3.19 million-barrel forecast. The White House's reaffirmation of President Trump's plan to impose tariffs on Canadian and Mexican imports added to market uncertainty, while concerns over sanctions on Russian energy flows and global economic growth weighed on sentiment. Traders are also watching an upcoming OPEC+ meeting on February 3, with supply changes from April in focus, while Libya's oil exports have returned to normal following a temporary disruption.
