Oil rises on strong US fuel demand as supply concerns continue

Oil rises on strong US fuel demand as supply concerns continue

/ 04:21 PM March 14, 2024

Oil rises on strong US fuel demand as supply concerns continue

A model of petrol pump and a rising stock graph are seen in this illustration taken Jan 15, 2024. REUTERS/Dado Ruvic/Illustration/file photo

Oil prices climbed in early trade on Thursday, supported by strong demand in the U.S. after gasoline stocks hit a three month low and crude stockpiles dropped unexpectedly, with supply concerns remaining after Ukrainian attacks on Russian refineries.

Brent futures for May climbed 11 cents, or 0.13 percent, to $84.14 a barrel at 0652 GMT, while April U.S. West Texas Intermediate (WTI) crude rose 10 cents, or 0.13 percent, to $79.82 per barrel.

Article continues after this advertisement

Both contracts had risen about 3 percent to a four-month high on Wednesday on the elevated U.S. demand outlook and heightened geopolitical risk.

FEATURED STORIES

“Strong US products exports led gasoline stock to fall to a three-month low. Rising gasoline prices are supporting crack spread for refiners. Market also reacted to increasing geopolitical risks after a Ukrainian drone attacked a Russian refinery,” said ANZ analysts in a client note.

U.S. crude oil stockpiles

U.S. gasoline inventories slid for a sixth straight week, falling by 5.7 million barrels to 234.1 million barrels, the Energy Information Administration (EIA)said on Wednesday, triple the expectations for a 1.9 million-barrel draw.

Article continues after this advertisement

Stocks of motor fuel at the U.S. Gulf Coast fell to their lowest since November 2022, while finished motor gasoline supplied, a proxy for demand, edged up 30,000 barrels per day to more than 9 million bpd for the first time this year.

Article continues after this advertisement

U.S. crude oil stockpiles also fell unexpectedly as processing increased.

Article continues after this advertisement

Supportive on the demand front, the U.S. bought around 3.25 million barrels of oil for the country’s Strategic Petroleum Reserve for August delivery.

Strikes on Russia’s refinery

Supply-wise, Ukrainian drone strikes on Russian refining facilities continued for a second day on Wednesday, causing a fire at Rosneft’s biggest refinery in one of the most serious attacks against Russia’s energy sector in recent months.

Article continues after this advertisement

“The recent push-up in oil prices has been attributed to a tighter supply-side factor, and given next week’s risk event (the outcome of the Fed’s FOMC meeting on 20 March) we may see some consolidation at the US$80.55/81.65 per barrel resistance zone for WTI crude,” senior market analyst at OANDA Kelvin Wong said.

In Ryazan, a drone attack caused a fire at Rosneft’s refinery. Two sources familiar with the situation told Reuters that the refinery had been forced to shut down two primary oil refining units.

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our daily newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

TAGS: demand, oil prices, supply

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our newsletter!

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

© Copyright 1997-2024 INQUIRER.net | All Rights Reserved

This is an information message

We use cookies to enhance your experience. By continuing, you agree to our use of cookies. Learn more here.