On Thursday (January 16th), international oil prices continued to rise, staying near a nearly six-month high. The February futures of US crude oil are currently trading at $80.56 per barrel, an increase of about 0.6%. The main contract for US crude oil, the March futures, is currently trading at $79.17 per barrel. Oil prices rose more than 3% on Wednesday, aided by a significant reduction in US crude oil inventories and the possibility of supply disruptions due to new US sanctions on Russia, although news of the Gaza ceasefire agreement slightly limited the increase in oil prices.

Brent crude oil futures closed up $2.11, or 2.64%, on Wednesday, settling at $82.03 per barrel, the highest since August 2024. The settlement price of US crude oil futures in February rose by $2.54, or 3.28%, to $80.04 per barrel, the highest since July. The more active March crude oil futures rose 2.95% on Wednesday, settling at $78.71 per barrel.

In settled trades, Brent crude hit its highest level since July, with US crude rising more than $3 per barrel.

The US Energy Information Administration (EIA) reported that US crude oil inventories fell to their lowest level since 2022 last week, as exports increased and imports decreased. The increase in gasoline and distillate inventories exceeded expectations.

Bob Yawger, head of futures at Mizuho Energy, said, "The decrease in crude oil inventories is mainly due to import and export dynamics." He added, "The export volume is incredible," and pointed out that many of them were booked before the sanctions were announced.

The International Energy Agency (IEA) stated in its monthly oil market report that the latest round of US sanctions on Russian oil could seriously disrupt Russia's oil supply and distribution.

The United States and Qatar announced on Wednesday that negotiators have reached a phased agreement to end the Gaza war between Israel and Hamas. This limits the increase in crude oil prices.

However, US data shows that consumer price increases in December were slightly higher than expected, with the US dollar index falling on Wednesday and US stocks surging, providing support for oil prices.

US increases sanctions on Russia, making it more difficult for Trump to lift sanctions after taking office

On Wednesday, the United States implemented hundreds of sanctions against Russia in an effort to increase pressure on Moscow in the final days of the Biden administration's term and protect some of the sanctions already in place before Trump's second presidential term.

The US State Department and Treasury Department have imposed sanctions on over 250 targets, including some companies headquartered in China, aimed at combating Russia's evasion of US sanctions and its military industrial base.

As part of the action, the Treasury Department has implemented new restrictions on nearly 100 sanctioned entities, which could complicate Trump's future efforts to lift sanctions.

The US Treasury Department stated in a statement that Washington will impose new sanctions on nearly 100 important Russian entities that have previously been sanctioned by the US, including Russian banks and companies operating in the Russian energy sector. The Ministry of Finance stated that this move increases the risk of secondary sanctions related to these entities.

Jeremy Paner, a partner at Hughes Hubbard&Reed law firm, said these actions are "anti Trump measures" because additional sanctions cannot be reversed without congressional approval.

It is currently unclear how Trump, who will replace Biden on Monday, will handle the issue of sanctions against Russia. Trump has always been friendly towards Russian President Putin in the past and stated on Monday that he will strive to meet with Putin as soon as possible to discuss the Ukraine issue.

The US government has also taken action to crack down on the sanctions evasion program established between Russia and major Asian powers, targeting regional clearing platforms between the two countries that Washington claims have been helping with cross-border payments for sensitive goods. The US Treasury Department stated that several Russian banks subject to US sanctions are also participants.

Keremet Bank, a financial institution in Kyrgyzstan, was also sanctioned on Wednesday after being accused by the US Treasury Department of cooperating with Russian officials and a bank designated by the US to assist in evading sanctions.

The US State Department has also imposed sanctions on the Zaporizhzhia Nuclear Power Plant controlled by Russia. Russian news agencies quoted a nuclear power plant spokesperson on Wednesday as saying that sanctions will not affect the operation of the nuclear power plant.

Consumer prices in the United States rose the most in nine months in December; But the core inflation rate has fallen back

In December, consumer prices in the United States experienced the largest increase in nine months due to rising energy commodity costs. The Consumer Price Index (CPI) in December increased by 0.4% month on month, the largest increase since March, with CPI rising by 2.9% year-on-year. This is the largest increase since July.

However, the core CPI in December increased by 3.2% year-on-year, lower than the 3.3% year-on-year increase in November, and the month on month increase also slightly declined. This increases the possibility of a month on month flattening of the Personal Consumption Expenditures (PCE) price index and prompts financial markets to bet that the Federal Reserve will not cut interest rates until June. The PCE Price Index is an indicator used by the Federal Reserve to measure the achievement of its 2% inflation target

The US stock market surged on Wednesday, with all three major stock indices recording their largest single day percentage gains in over two months, boosting expectations for oil demand growth. Among them, the Dow Jones Industrial Average rose 703.27 points, or 1.65%, to 43221.55 points; The S&P 500 index rose 107.00 points, or 1.83%, to 5949.91 points; The Nasdaq index rose 466.84 points, or 2.45%, to 19511.23 points.

IEA Monthly Report: Latest US sanctions could seriously disrupt Russian oil supply

The International Energy Agency (IEA) stated in its monthly oil market report released on Wednesday that the latest round of sanctions announced by the United States against Russian oil last Friday could seriously disrupt Russia's oil supply and distribution chain.

Due to the uncertainty of the overall impact of the new sanctions, the Paris based International Energy Agency has maintained its supply estimates for Russia and Iran unchanged this month, but stated that US measures may lead to tighter crude oil and fuel markets.

The IEA has raised its forecast for global oil demand growth in 2024 to 940000 barrels per day (previously predicted at 840000 barrels per day), following stronger than expected global oil demand growth in the fourth quarter.

The IEA has lowered its forecast for global oil demand growth in 2025 to 1.05 million barrels per day (previously forecasted at 1.1 million barrels per day)

The IEA points out that global oil supply is expected to increase by 1.8 million barrels per day by 2025, faster than the growth rate of demand.

OPEC predicts strong global oil demand growth in 2026, cuts 2024 forecast for sixth time

The Organization of the Petroleum Exporting Countries (OPEC) predicted on Wednesday that world oil demand will grow at a relatively strong rate similar to this year in 2026, while lowering its growth forecast for 2024 for the sixth time, highlighting the weakening role of Asian powers as the engine of world demand growth.

OPEC stated in its monthly oil report that global oil demand will increase by 1.5 million barrels per day in 2024, compared to the previous forecast of 1.61 million barrels per day. OPEC predicts a global oil demand growth of 1.45 million barrels per day by 2025, consistent with previous forecasts.

OPEC predicts that global oil demand will increase by 1.43 million barrels per day in 2026. This is the first time OPEC has made a forecast for 2026 in its monthly oil report.

OPEC reports a 4.2% decrease in Russian oil production in 2024

The Organization of the Petroleum Exporting Countries (OPEC) announced on Wednesday that Russia's crude oil production decreased by 4.2% last year, from 9.57 million barrels per day in 2023 to 9.17 million barrels per day, as part of OPEC+'s efforts to stabilize the market.

Russia's oil production in December was 8.985 million barrels per day, a decrease of 6000 barrels per day from November, but slightly higher than the production quota of 8.98 million barrels per day stipulated in the OPEC+oil producing countries agreement.

OPEC+oil producing countries include OPEC member countries and other countries such as Russia. Russia has promised to compensate for the overproduction in the previous months.

It is expected that Russia's quota will increase to 9.04 million barrels per day from April.

EIA： US crude oil inventories drop to two-year low

The US Energy Information Administration (EIA) announced on Wednesday that US crude oil inventories (excluding Strategic Petroleum Reserve (SPR)) fell to their lowest level since April 2022 last week due to increased exports and decreased imports.

The US Energy Information Administration (EIA) stated that as of the week ending January 10th, crude oil inventories decreased by 2 million barrels to 412.7 million barrels, while analysts expect inventories to decrease by 992000 barrels.

EIA reported that net crude oil imports in the United States decreased by 1.3 million barrels per day to 2.05 million barrels per day. The weekly crude oil export volume increased by 1 million barrels per day to 4.08 million barrels per day.

Bob Yawger, head of futures at Mizuho Energy, said, "The decline in crude oil prices is largely influenced by import and export dynamics

He added, "These export situations are unbelievable because the WTI/Brent crude oil price difference exceeds $3.50 per barrel, and all of this happened before the Biden administration imposed sanctions on Russia

The crude oil inventory at the Cushing delivery center in Oklahoma increased by 765000 barrels.

Yawger from Mizuho said, "The increase in Cushing crude oil inventories should help alleviate extreme spot premiums. The situation is not optimistic, but it is better than last week

The US Energy Information Administration reported that crude oil processing at refineries decreased by 255000 barrels per day this week. The utilization rate of the refinery decreased by 1.6 percentage points to 91.7%.

The US Energy Information Administration (EIA) also stated that US gasoline inventories increased by 5.9 million barrels this week to 243.6 million barrels, while analysts expect an increase of 2 million barrels.

The gasoline supply, which measures demand, decreased from 8.48 million barrels per day to 8.33 million barrels per day last week.?

EIA data shows that oil storage, including diesel and heating oil, increased by 3.1 million barrels to 132 million barrels, the highest level since January 2024, exceeding the expected increase of 800000 barrels.

Josh Young, Chief Investment Officer of Bison Interests, said, "Considering seasonal factors, we see a strong upward trend in oil prices and an increased bearish trend in products. Overall, this is quite favorable for oil bulls

He added, 'In the past few weeks, oil prices have rebounded from over $60 to over $70, which is not surprising. Unless there is new supply or a significant decrease in demand, oil prices may rise sharply this summer.'.

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There was also a series of economic data released this trading day, focusing on the monthly rate of US retail sales in December (commonly known as "terrorist data") and the change of the number of US initial jobless claims, the monthly rate of US import price index in December, and the relevant news of geographical situation.