Oil prices rose on Wednesday as caution over tightening supply countered the negative impact of uncertain Chinese demand growth and news that the US will release more crude from its reserves.
Brent crude futures for December settlement were up $1.54, or 1.6%, to $91.56 a barrel by 1647 GMT. US West Texas Intermediate crude (WTI) for November, that is expiring on Thursday, was at $84.55 a barrel, up $1.73, or 2.1%. In the previous session, the benchmarks hit a two-week low on reports that President Joe Biden plans to release 15 million barrels of oil from the Strategic Petroleum Reserve (SPR). Biden is set to speak at 1715 GMT on efforts to lower fuel costs in the US, which have dropped over the last two weeks but remain higher than a month ago.
US crude inventories fell unexpectedly last week – down 1.7 million barrels, weekly government showed, against expectations for a build of 1.4 million barrels. SPR levels fell 3.6 million barrels to just over 405 million, the lowest since May 1984. Meanwhile, US refiners were still operating at higher rates than usual for this time of year, running at 89.5% of capacity.
“Oil is taking it as a positive as we got a surprise drawdown even with another SPR release,” said Phil Flynn, Senior Analyst at Price Futures Group in Chicago.
Published in The Express Tribune, October 20th, 2022.
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