TL;DR summary:
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EIA data showed unexpected builds across crude, gasoline and distillates.
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Inventory figures clashed with prior expectations for tightening balances.
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Oil prices remained supported by geopolitical risk and supply concerns.
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US oil inventories surprise to the upside as geopolitical risk lifts crude prices
The US Energy Information Administration’s long-delayed weekly inventory report delivered a notable upside surprise, complicating an oil market already being driven by heightened geopolitical risk and supply-disruption concerns.
The US Energy Information Administration published its data for the week ended December 19 after a delay from the original Monday release window. The figures ran counter to expectations from an extended Reuters poll, which had anticipated a sizeable crude draw alongside modest builds in refined products.
Instead,
- US crude inventories rose by 405,000 barrels to 424.82 million, versus forecasts for a 2.4 million-barrel draw,
- Gasoline stocks climbed sharply, up 2.9 million barrels to 228.49 million, well above expectations for a 1.1 million-barrel increase,
- Distillate inventories also rose, increasing 202,000 barrels to 118.7 million, roughly in line with consensus expectations.
The data suggest softer near-term refinery demand and relatively comfortable supply conditions, particularly in gasoline, at a time when markets had been leaning toward tighter balances. Under normal circumstances, such numbers would have weighed on prices. However, broader macro and geopolitical dynamics continued to dominate sentiment.
Earlier, oil prices had already settled sharply higher, driven by renewed geopolitical tension. Brent crude futures rose $1.30, or 2.1%, to settle at $61.94 a barrel, while US WTI gained $1.34, or 2.4%, to close at $58.08.
Markets reacted to claims from Moscow that Ukrainian drones had targeted a Russian presidential residence, prompting Russia to review its stance on peace talks. Ukraine dismissed the accusations, but the headlines revived concerns about prolonged conflict risk. At the same time, tensions in Yemen intensified after Saudi air strikes followed clashes involving southern separatist forces, keeping Middle East supply risks firmly in focus.
Analysts noted:
- geopolitical instability, alongside strong Chinese seaborne crude imports, is helping offset otherwise bearish inventory signals
- prices likely to recover modestly into 2026 as non-OPEC+ supply growth slows
