Crude Oil Prices Edge Higher on US Inventory Drop and Ukraine Peace Talks

Crude oil prices rose in Asian trade on Thursday following a larger-than-expected decline in US crude inventories. Brent crude for January delivery increased 0.3% to US$63.71 per barrel, while West Texas Intermediate (WTI) rose 0.4% to US$59.68 per barrel. The drop in US crude stockpiles provided immediate support to global oil prices, influencing energy-linked stocks in India.

US Crude Inventories Fall Sharply

Data from the US Energy Information Administration showed a decline of 3.4 million barrels in crude inventories for the week ending 14 November, well above analysts’ expectations of a 0.6 million-barrel drop. The fall was driven by higher crude exports and increased refinery activity. However, gasoline and distillate stocks rose, indicating weaker demand for refined products despite tighter crude balances.

Geopolitical Developments 

Investors are also watching geopolitical developments. The US plans to enforce new sanctions on Russian energy firms Rosneft and Lukoil from 21 November, aiming to limit Moscow’s crude exports.

At the same time, reports suggest that the US and Russia are working on a new peace proposal for Ukraine. This could involve Ukraine accepting a US-drafted plan that requires ceding some territory and weapons, potentially easing concerns about further sanctions on Russian oil.

How Will This Impact Indian Markets? 

Higher oil prices can have mixed effects on the Indian stock market. Energy companies and crude importers may see increased revenues, while higher crude prices could put pressure on fuel costs, affecting sectors dependent on transportation and logistics. Investors in Indian equities are closely monitoring global oil trends alongside domestic inflation and policy signals.

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Conclusion

Global oil markets are balancing supply factors, US inventory data, and geopolitical developments, with potential ripple effects on Indian stocks. While a decline in US crude inventories supports prices, rising gasoline stocks and ongoing Ukraine peace talks add caution to market optimism. Indian investors should watch oil-linked sectors and policy updates closely.

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