Markets fear falling oil supplies against demand as the United States continues to draw from its strategic oil stockpiles.
The United States is up against a new energy crisis as oil prices hiked a staggering 3 percent on Wednesday marking a ten-month high of over $94 per barrel.
These numbers were mainly driven by OPEC+’s previously announced decision to slash oil output, in addition to growing market fears over declining US oil stockpiles, or Strategic Petroleum Reserve (SPR), which have dropped over 250 million barrels in just one year – most recently recording a sharp decline the past two weeks.
New York-traded West Texas Intermediate (WTI) crude scheduled for November delivery closed at $93.68 per barrel on the official exchange market, up $3.29 or 3.7 percent, slightly down from a session peak of $94.14 – the highest since November 2022.
Meanwhile, London-traded Brent oil for December delivery raised $1.93 to reach $94.36, marking a 2.1 percent increase. The session peak was $94.78 – the highest for the global crude price since it hit $95.96 on September 19.
“The present move up is unequivocally led by scarce supply and actual inventory decline,” said Tamas Varga of oil brokerage firm PVM.
All about Cushing
In the past three months, oil prices have risen over 30 percent since Saudi Arabia and Russia led a production cut announced by OPEC+.
Since mid-September, US oil inventory was drained by 2.2 million barrels – compared to analysts’ expected 320,000 – as revealed by the Weekly Petroleum Status Report of the US Energy Information Administration (EIA). Crude stocks are now at 416.3 million barrels.