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Oil futures pulled back early Thursday after a build in U.S. petroleum supplies and record domestic production cooled a rally sparked by disrupted shipments in the Red Sea.
Price action
-
West Texas Intermediate crude for February delivery
CL00,
-1.68% CLG24,
-1.68%
fell 22 cents, or 0.3%, to $74 a barrel on the New York Mercantile Exchange. -
February Brent crude
BRN00,
-1.58% BRNG24,
-1.58% ,
the global benchmark, was off 25 cents, or 0.3%, at $79.45 a barrel on ICE Futures Europe.
Market drivers
“The re-emergence of the geopolitical risk premium for oil has become notable, yet the market’s central attention remains steadfast on the enduring and fluctuating dynamics of supply and demand,” said Stephen Innes, managing director at SPI Asset Management, in a note.
Several shippers have suspended shipments through the Red Sea after a series of drone and missile attacks by Iran-backed Houthi rebels since the start of the Israel-Hamas war. The U.S. earlier this week announced a naval coalition would move to halt the attacks.
Read: Attacks in the Red Sea add to global shipping woes
Brent and WTI rose for a third straight session Wednesday, ending at their highest since Nov. 30, but pulled back from session highs after data from the Energy Information Administration showed a rise in U.S. crude, gasoline and distillate supplies last week.
Domestic petroleum production, meanwhile, marked a climb to another record high at 13.3 million barrels a day, based on EIA data going back to 1984.
On top of worries about Chinese demand, the market is grappling with apprehensions sparked by Wednesday’s EIA report, Innes said. The rise in U.S. refined-fuels supplies amplified worries about domestic demand, he said.
