Brent Crude prices hit $86.10 per barrel early on Thursday, jumping to the highest level in three years, before retreating to just above $85 amid profit-taking.
Driven by signs of tighter oil supply and a bullish EIA weekly inventory report on Wednesday, oil prices rose early on Thursday, with the international benchmark, Brent Crude, rallying to $86.10—the highest price since October 2018. The U.S. benchmark, WTI Crude, settled at a fresh seven-year high on Wednesday and was up early on Thursday before pulling back later in the morning.
Profit-taking eased the prices on Thursday after they had reached, again, multi-year highs.
Sentiment continues to be bullish after the U.S. Energy Information Administration (EIA) reported on Wednesday a surprise crude inventory draw of 400,000 barrels for the week to October 15. At 426.5 million barrels, commercial crude inventories remain below the five-year average for this time of the year.
Gasoline inventories were also down last week by a sizeable 5.4 million barrels. This compared with a draw of 2 million barrels for the previous week.
EIA’s report was constructive, ING strategists Warren Patterson and Wenyu Yao said on Thursday, noting that “While the weekly numbers showed that commercial crude oil inventories declined by just 431Mbbls, total oil and product stocks fell by 9.81MMbbls over the week.”
Moreover, crude oil inventories at the Cushing hub fell by more than 2 million barrels, which leaves them at 31.23 million barrels, the lowest level since 2018, according to ING’s strategists.
“Continued strength in oil prices means that pressure on OPEC+ to pump more will only grow,” they said.
“The reluctance of OPEC+ to pump more in the short term suggests that oil prices will remain well supported for the remainder of this year,” ING noted.
By Tsvetana Paraskova for Oilprice.com
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