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Oil prices settle higher on surprise draw in US crude supplies, Russia disruptions

Published 03/13/2024, 08:54 AM
Updated 03/14/2024, 02:56 AM
© Reuters.

Investing.com -- Oil prices settled sharply higher Wednesday, as an unexpected draw in U.S. inventories pointed to rising demand just as Russia refineries faced disruptions following Ukraine attacks.

At 14:30 ET (18.30 GMT), the  West Texas Intermediate crude futures rose 2.8% to $79.72 a barrel, while the Brent oil futures expiring in May rose 2.6% to $84.03 a barrel.

US inventories in surprise decline; Russia supply disruptions

Inventories of U.S. crude fell by roughly 1.5M barrels in the week ended Mar. 8, confounding expectations for a build of 900,000 barrels. 

Refinery activity continued to improve, and were operating at 86.8% of their capacity, up from the 84.9% pace seen in the prior week.

Gasoline inventories, one of the products that crude is refined into, fell by about 5.7M barrels against expectations of a draw of1.9M barrels while distillate stockpiles unexpectedly rose by 888,000 barrels, compared to expectations of a fall of 150,000 barrels.

In further dent to global supplies, Ukrainian drones continued to hit oil refineries in Russia for the second-straight day. 

IEA report in focus 

A monthly report from the International Energy Administration due Thursday will be closely watched for clues about the supply and demand outlook. The IEA's report follows OPEC's report released on Tuesday.

In its monthly report, the Organization of Petroleum Exporting Countries maintained its forecast that world oil demand will increase by 2.25 million barrels per day in 2024, and by 1.85 million bpd in 2025. 

(Ambar Warrick contributed to this story)

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