Oil prices remained stable on Thursday as a larger-than-expected drawdown in U.S. fuel inventories and escalating tensions in the Middle East countered the impact of a stronger dollar.
Brent crude futures edged up 8 cents to $70.86 per barrel, while U.S. West Texas Intermediate (WTI) crude for April delivery rose 4 cents to $67.20. The more actively traded WTI May contract gained 5 cents to $66.96.
U.S. government data revealed a significant drop in distillate inventories, including diesel and heating oil, which fell by 2.8 million barrels last week. However, crude stockpiles increased by 1.7 million barrels.
Meanwhile, geopolitical risks added upward pressure on oil prices. Israel launched a new ground operation in Gaza, breaking a nearly two-month ceasefire, while the U.S. continued airstrikes on Houthi targets in Yemen in response to attacks on Red Sea shipping. Rising tensions between the U.S. and Iran have further fueled concerns about potential supply disruptions.
On the economic front, the U.S. Federal Reserve left interest rates unchanged but maintained its outlook for two rate cuts later this year. The U.S. dollar strengthened, making crude more expensive for international buyers, which limited further price gains.
While short-term volatility persists, the oil market is expected to remain closely balanced in 2025, with supply and demand dynamics shaping future price trends.
