Oil jumps 4% on tight supply

NEW YORK:

Oil prices soared about 4% on Wednesday on supply tightness with another US crude stock drawdown, and the growing prospect of new Western sanctions against Russia even as Moscow and Kyiv held peace talks. Brent futures rose $4.17, or 3.8%, to $114.40 a barrel by 1457 GMT, while US West Texas Intermediate (WTI) crude rose $3.97, or 3.8%, to $108.21. US crude stockpiles fell for a second straight week, falling by a bigger-than-expected 3.4 million barrels last week, cutting inventories in the world’s top consumer to 410 million barrels, their lowest since September 2018, government data showed. “US crude inventories have shown another draw despite production ticking higher and yet one more solid SPR (Strategic Petroleum Reserve) release into commercial inventories,” said Matt Smith, lead oil analyst at Kpler, noting the crude draw was driven by rising refining activity. After six weeks of holding steady, US crude output inched up 100,000 barrels per day (bpd) last week to 11.7 million bpd, while stocks in SPR fell to their lowest since May 2002, and Gulf Coast refinery utilisation rose to its highest since January 2020. 

Published in The Express Tribune, March 31^st, 2022.

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