Sep 19, 2025 (MarketLine via COMTEX) --
There was a slight decrease in crude oil prices during the week due to high inflation and faltering employment creation in the US. It led to fuel demand worries in the country, which also reflected in the weekly rise in the US distillate fuel stockpiles. To address this concern, the US Federal Reserve announced a small cut in the interest rates, which somewhat limited the downside to prices. Additionally, concerns over recurring drone strikes from Ukraine on energy facilities within Russia also helped contain the slide in oil prices during the week. Prices were also buoyed by the likelihood of the US imposing new sanctions on Russia to indirectly force the country into peace talks with Ukraine.
Some key factors that led to changes in crude oil prices this week are as follows:
Oil prices gained on Monday and Tuesday, supported by increasing risk of Ukrainian drone attacks on Russian infrastructure, particularly on energy assets. The fresh attack involving around 350 drones targeted several facilities, including the Kirishi refinery of Surgutneftegas in Leningrad Oblast, that has a processing capacity of 355,000 bpd. Prices also received support from prospects of the US implementing additional sanctions on Russian energy exports after the peace talks with Ukraine stalled. Besides, the US resumed trade talks with China, giving additional fillip to oil prices. Oil prices dipped on Wednesday, weighed down by expectations of a likely increase in crude oil exports from Kazakhstan following the restart of a major pipeline. Oil flows from the Baku-Tbilisi-Ceyhan pipeline were suspended for the past few weeks over contamination issues, which were now addressed and supplies resumed in full capacity. Prices were also weighed down by a weekly build in distillate fuel stocks in the US, indicating sluggishness in its economy. As per the US Energy Information Administration (EIA), distillate inventory grew by 4 million barrels for the week ending on September 12, 2025, following a rise of 4.7 million barrels in the earlier week. However, the slide in oil prices was somewhat cushioned after interest rates in the US were lowered for the first time this year. During its fiscal review, the US Federal Reserve approved a 25-basis-point reduction in the country’s lending rates, thereby giving some respite to individual as well as corporate borrowers. Oil prices fell last Thursday and Friday, weighed down by worries over a potential glut of crude oil in global markets amid the anticipated shutdown of US refineries for maintenance. Prices were also weighed down by faltering economic growth in the US and its likely impact on crude oil demand. While announcing a rate cut, the US Federal Reserve cited the recent weakness in the domestic job market as one of the reasons for the change in fiscal policy stance. However, the decline in oil prices was somewhat contained by a large decrease in the weekly US crude stockpiles. According to the US EIA, crude inventory in the country dropped by 9.3 million barrels for the week ending on September 12, 2025.
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COMTEX_469038610/2227/2025-09-25T09:36:10
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