On Wednesday, oil prices rose following the fall on US crude stocks among the tight market.
Brent crude oil futures closed at USD85.82/barrel after gaining 0.9% or 74 cents. It was also the highest level since October 2018.
Meanwhile, US WTI for November expired on the same day settled at USD83.87/barrel after jumping by 1.1% or 91 cents. For December, the benchmark was closed with an increase of 98 cents to USD83.42/barrel.
According to the US Energy Information Administration (EIA), in the week ended October 15, the country’s crude inventories slumped by 431,000 barrels, in contrast with predictions for an increase. Gasoline stocks plunged even deeper by 5 million barrels on the back of refinery maintenances.
In the Cushing hub, Oklahoma, US stockpiles were at the lowest level since October 2018 while gasoline was at the weakest since November 2019. Likewise, distillate stocks fell to levels not seen since early 2020.
The global oil market is tight with the Organization of the Petroleum Exporting Countries (OPEC) kept its supply increase slow and as US demand has grown stronger. Even when refiners have been boosting output on the back of high margins, refinery maintenances has been restraining it.
However, worries regarding the slumping inventories have risen for a different reason, when the refiners to go back to ramp up production to meet strong demand for gasoline and distillate.
