Crude oil prices rose sharply on Wednesday after data showing an unexpected drop in U.S. crude stockpiles in the week ended September 22 added to concerns about tightening supplies amid production cuts by OPEC and its allies.
West Texas Intermediate Crude oil futures for November climbed $3.29 or about 3.6% to settle at $93.68 a barrel, the highest settlement since August 29, 2022.
Brent crude futures were up $1.98 or about 2.1% at $94.41 a barrel a little while ago.
Data released by the U.S. Energy Information Administration (EIA) this morning showed crude inventories in the U.S. fell by 2.169 million barrels during the week ended September 22 versus expectations for a 0.9 million barrel increase.
Gasoline stockpiles rose by 1.027 million barrels last week compared to forecasts for a drop of 0.5 million barrels. Meanwhile, distillate stockpiles increased by 0.398 million barrels versus the expected draw of 1 million barrels.
The data also said Cushing inventories fell to the lowest level since July 2022.
Meanwhile, the American Petroleum Institute reported on Tuesday that U.S. crude oil stockpiles rose by 1.586 million barrels during the week ended September 22 compared to expectations for a small drop.
“Brent crude is now just over a few dollars away from the $100 price level, which could see further momentum buying if global leaders don’t do anything to try to jawbone prices down,” says Edward Moya, Senior Market Analyst at OANDA.
He adds, “The Biden administration will undoubtedly want lower energy prices given we are just over a year from the presidential election, but tapping the low levels from the SPR will only provide temporary relief.”
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