Oil Prices Surge on Unexpected US Inventory Draw and Russia Disruptions
Surprise Inventory Draw Boosts Oil Prices
Oil prices saw a significant increase as U.S. inventories unexpectedly declined, indicating a rise in demand. This positive trend coincided with disruptions at Russian refineries following attacks in Ukraine.
By 14:30 ET (18.30 GMT), the price of oil surged by 2.8% to $79.72 a barrel, while the May futures rose by 2.6% to $84.03 a barrel.
US Inventory Decline and Russian Supply Issues
Surprisingly, U.S. inventories dropped by approximately 1.5 million barrels in the week ending March 8, defying expectations of a 900,000-barrel increase.
Refinery activity also showed improvement, operating at 86.8% capacity compared to the previous week’s 84.9%.
Gasoline inventories rose by 5.7 million barrels against an expected draw of 1.9 million barrels, while distillate stockpiles decreased by 888,000 barrels, contrary to the anticipated 150,000-barrel decline.
Furthermore, Ukrainian drones continued to target Russian oil refineries for the second consecutive day, further impacting global supplies.
IEA Report and OPEC Forecast
The International Energy Agency’s upcoming report, scheduled for Thursday, will provide insights into the supply and demand outlook. This report follows OPEC’s recent forecast released on Tuesday.
OPEC maintained its projection of a 2.25 million barrels per day increase in global oil demand for 2024 and a 1.85 million bpd rise in 2025.
It’s essential to monitor these reports for crucial updates on the oil market’s future direction.
(Ambar Warrick contributed to this story)
