Oil Mixed As Impact Of Middle East Cease-fire Quickly Dissipates

Also, analysts diffuse the likelihood of Trump tariffs ever being imposed: File Image/Pixabay

A surprise build in U.S. gasoline stocks coupled with thin trading ahead of a meeting of the Organization of the Petroleum Exporting Countries (OPEC) resulted in oil prices remaining fairly range bound on Thursday.

Brent settled up 2 cents at $72.83 per barrel, while West Texas Intermediate settled down 5 cents to $68.72.

While analysts had expected a 46,000 barrel draw, the Energy Information Administration reported a gasoline build of 3.3 million barrels, although crude stocks plummeted by 1.8 million barrels in the week ended Nov. 22, far more than expectations for a 605,000 barrel draw.

Matt Smith, analyst at Kpler, said, "It is surprising to see gasoline inventories building so much and implied demand not really budging week-on-week, given expected record travel this [U.S.] Thanksgiving."

Meanwhile, OPEC sources said the cartel will discuss a further delay at its Dec. 1 meeting to the oil production increase that was originally set for January, due to perceptions of weaker global demand and increasing output.

Of Thursday's trading, Bloomberg observed that "U.S. trading has quietened before the holiday, with just over 500,000 lots of WTI changing hands — almost 40 percent less than the year-to-date average."

Also on Thursday, enthusiasm for the ceasefire in the Middle East seemed to have worn off for some: Rania Gule, senior market analyst at XS.com, noted that while the agreement "reduces tensions in the Middle East, acts as a stabilizing factor" for oil, it will likely have a "limited long-term impact, as markets remain highly sensitive to any potential escalation in the region."

As for the worry generated earlier in the week by U.S. president-elect Donald Trump vowing to increase tariffs on energy exports from Canada, Goldman Sachs' co-head of global commodities research Daan Struyven agreed they could cause "some pretty significant consequences," but he doubted the tariffs will ever be implemented.

Viktor Shvets, global strategist at Macquarie Capital, agreed, and told CNBC he believes tariffs are used as a negotiating tool to achieve certain objectives such as strengthening the border.

"I do not believe for a second that there will be a massive increase in overall tariffs because that will represent a tax on U.S. domestic manufacturers; that will also represent a tax on U.S. exporters," he said.