(Reuters) -Oil prices edged up in Asia 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.
futures for May climbed 19 cents, or 0.23%, to $84.22 a barrel at 0347 GMT, while April U.S. West Texas (WTI) crude was up 15 cents, or 0.19%, at $79.87 per barrel.
Both contracts had risen about 3% to a four-month high on the elevated U.S. demand outlook and heightened geopolitical risk.
“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. 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.
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.
oil stockpiles also fell unexpectedly as processing increased.
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.
Meanwhile, 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.
After seriously damaging Lukoil’s refinery in Nizhny Novgorod on Tuesday, Ukraine hit refineries in the Rostov and Ryazan regions, Russian officials 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.
Separately, concerns on how crude output would pan out in March, given the rise in February, kept a lid on prices.
“However, supply side developments are not price supportive, with OPEC+ production for February showing weaker compliance. Iraq remained non-compliant for the second month,” said ANZ analysts.
Nigeria’s oil production is also steadily rising, hitting 1.476 million barrels per day (bpd) in February, the highest in more than three years.