US Oil Jumps $1 on Crude Draw, Tight Global Supply
09.28.2023 By Tank Terminals - NEWS

September 28, 2023 [Reuters]- U.S. oil jumped nearly $1 a barrel on Thursday to its highest in more than a year as a steep drop in crude stocks in the United States added to worries of tight global supplies from OPEC+ cuts led by Saudi Arabia.

 

U.S. West Texas Intermediate crude futures (WTI) led the charge, rising above $95 for the first time since August last year. WTI was at $94.60 a barrel, up 92 cents, or 1%, by 0145 GMT.

Brent crude futures climbed 77 cents, or 0.8%, to $97.32 a barrel after hitting levels not seen since November.

“The oil market is quickly coming to terms with the fact that the OPEC+ cuts announced in the summer are having a deep effect on crude availability,” said Stefano Grasso, a senior portfolio manager at 8VantEdge in Singapore.

“Stocks are drawing while demand keeps growing. We are still far away from a price level causing demand destruction.”

U.S. crude stocks fell by 2.2 million barrels last week to 416.3 million barrels, government data showed, far exceeding the 320,000-barrel drop analysts expected in a Reuters poll.

Crude stocks at the Cushing, Oklahoma, storage hub, delivery point for U.S. crude futures, fell by 943,000 barrels in the week to just under 22 million barrels, the lowest since July 2022, data showed.

Stockpiles at Cushing have been falling closer to historic low levels due to strong refining and export demand, prompting concerns about quality of the remaining oil at the hub and whether it will fall below minimum operating levels.

The crude draws follow production cuts of 1.3 million barrels a day to the end of the year by Saudi Arabia and Russia of the Organization of the Petroleum Exporting Countries and allies known as OPEC+. The group will be meeting on Oct. 4 to review markets.

“We expect as near-term oil prices continue to push higher a reduction of current supply cuts is increasingly likely,” National Australian Bank’s analysts said in a note.

Grasso said: “I think Saudi can accept much higher prices, but not much lower, and if cutting 10% production gives them 30% price increase it make sense to do.”

President Vladimir Putin ordered his government to ensure retail fuel prices stabilise after a jump caused by an increase in exports.

In response, his deputy prime minister cited proposals to restrict exports of oil products purchased for domestic use, adding to market tightness.

Pro Trial: Access 12,600 Tank Terminal and Production Facilities

12,600 tank storage and production facilities as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data

India's First Methanol Plant to be Set up in Telangana
11.21.2024 - NEWS
November 21, 2024 [Chem Analyst]- In a groundbreaking initiative, India is set to get its first m... Read More
Egypt in Talks with Foreign Companies Over Long-Term LNG Purchases, Sources Say
11.21.2024 - NEWS
November 21, 2024 [Reuters]- Egypt is in talks with U.S. and other foreign companies to purchase ... Read More
INEOS and GNFC Sign a Memorandum of Understanding to Build a New World Scale Acetic Acid Unit in India
11.21.2024 - NEWS
November 21, 2024 [INEOS]- INEOS Acetyls and Gujarat Narmada Valley Fertilizers & Chemicals L... Read More
Peru's State Oil Firm Could Open to Private Investors in 2025, Chairman says
11.21.2024 - NEWS
November 21, 2024 [Reuters]- Peru’s indebted state-run oil firm could consider offering a ... Read More