Oil prices fell sharply on Wednesday, with Brent settling over 1.4% lower, following a bearish EIA report showing US crude inventories rose by 5.2 million barrels, largely driven by higher imports. According to ING analysts Ewa Manthey and Warren Patterson, the sentiment in the oil market remains bearish, even as refined product data offered some optimism.

Gasoline stocks dropped by 4.73 million barrels, hitting their lowest level since November 2022, while distillate inventories fell by 643K barrels, remaining about 8% below the five-year average. Still, ING expects gasoline inventories to rise soon as refineries recover from maintenance.

Meanwhile, Saudi Aramco cut its official selling prices (OSPs) to Asia by $1.20/bbl, marking the lowest premium since January, following OPEC+’s supply increase of 137K b/d for December. ING notes that while refinery margins remain strong, this strength stems mainly from supply concerns rather than strong demand.

Overall, the oil market outlook stays bearish, with traders eyeing potential Russian supply disruptions and growing short positions in TTF funds — now at record highs.