Crude futures settled lower Jan. 13 on the back of a stronger US dollar and concerns regarding elevated global stockpiles.
NYMEX front-month February WTI settled down 30 cents at $52.91/b, and ICE March Brent declined 52 cents to $56.06/b.
An overnight oil price rally reversed in early US trading as supply outlooks came under pressure following comments from OPEC Secretary General Mohammed Barkindo.
Barkindo, speaking at the Gulf Intelligence online forum Jan. 13 said while he remained cautiously optimistic regarding oil markets, global crude inventories remain "stubbornly high," noting OECD stockpiles are some 160 million barrels above average.
Barkindo also said based on previous OPEC+ precedent, Iran's potentially imminent return to the market would likely be accommodated by the group until the country reaches its pre-sanctions capacity.
The incoming Biden administration is expected to abandon the White House's current maximum pressure campaign and resume negotiations with Iran, setting the stage for a deal that could see the return of Iranian oil to the global market.
A stronger US dollar added further pressure to oil prices. The ICE US Dollar Index was holding at around 90.31 in afternoon trading, up from a Jan. 12 close of 90.064
NYMEX February RBOB settled down 42 points at $1.5488/gal, while February ULSD climbed 22 points to $1.5989/gal.
Oil prices briefly rallied after the US Energy Information Administration reported US crude inventories declined 3.25 million barrels to 482.21 million barrels in the week ended Jan. 8. Notably, inventories at the NYMEX delivery point of Cushing, Oklahoma, saw a 1.98 million-barrel draw down in inventories to 57.23 million barrels.
It was the largest one-week draw in Cushing stocks since the week ended June 12.
But US gasoline demand remained weak, climbing just 90,000 b/d to 7.53 million b/d leaving it around 12% behind the five-year average, EIA said, highlighting concerns an early January demand bump typically seen in the wake of the December holidays may be weaker than normal.
US driving activity edged 0.2% higher in the week ended Jan. 8, according to Apple mobility data, but was still near levels last seen in late May.
Still, total US refined product demand surged 2.55 million b/d to 19.61 million b/d, pushing it ahead of the five-year average for the first time since early March, however, the bulk of this increase was the result of an uptick in industrial demand and was focused on petrochemical feedstocks and distillate fuels.
