Concerns of a tightening of global oil supplies grew on Thursday as new data showed a fall in stocks at a key Oklahoma storage facility in the US, pushing global oil prices higher, toward $100 per barrel.
Brent futures rose 1% to $97.25 per barrel as of 11:00 GMT, before surrendering some gains, as American benchmark West Texas Intermediate (WTI) hit $95 per barrel, a peak not seen since August of 2022.
According to analysts, the latest surge in oil prices came after data from the strategic storage hub in Cushing, Oklahoma, released by the Energy Information Administration (EIA), showed its stockpiles falling by 943,000 barrels over the fourth week in September as strong refining activity and high demand for exports weighed on supplies. Inventories at the hub are now just under 22 million barrels, near the hub’s operational minimum.
The government data showed total US crude stocks fell 2.2 million barrels in the previous week to 416.3 million barrels. Industry experts had predicted there would be a drop of 320,000 barrels.
Bart Melek, managing director of TD Securities, said in an interview with CNBC, “Today’s price action seems to be Cushing driven, as it reaches a 22 million bbl low, the lowest level since July 2022.” He said that the oil market looked to be on course for a “pretty robust deficit,” which would mean oil prices would remain at a “high level” for the remainder of the year if US stockpiles continue to diminish and the Organization of the Petroleum Exporting Countries and its allied nations (OPEC+) continued to restrain production output and exports.
Earlier in the month, Saudi Arabia had pledged to extend its voluntary reduction in oil output of 1 million barrels per day (bpd) until the end of the year.
Meanwhile Russia, the second largest crude oil producer in the world, and an ally of Saudi Arabia in OPEC+, also pledged to extend its voluntary reduction in oil output of 300,000 bpd until the end of the year. In addition, the Kremlin also introduced a temporary ban on the foreign sale of gasoline and diesel in an effort to stabilize the domestic market for fuel.
