Oil prices reversed earlier losses to rise early on Thursday, following a bullish OPEC report on global demand and a drop across the board in U.S. petroleum inventories which the EIA reported on Wednesday.
As of 11:00 a.m. EST on Thursday, WTI Crude was up 1.74% at $91.23, and Brent Crude traded at $92.81, up 1.38% on the day, despite prospects of a revival of the Iran nuclear deal and higher-than-expected U.S. inflation data for January, which showed annual inflation was 7.5 percent-the highest in 40 years.
Supporting oil prices on Thursday was the EIA report from Wednesday, which showed inventory draws across the board. In crude oil, the inventory draw was 4.8 million barrels for the week to February 4. In gasoline, the EIA reported an inventory decline of 1.6 million barrels for the first week of February. This compared with a build of 2.1 million barrels for the previous week.
Total U.S. commercial crude oil inventories are now just over 410 million barrels, the lowest level since 2018.
"Cushing crude oil inventories also continued to edge lower, falling by 2.8MMbbls to just 27.7MMbbls. We are getting into territory where there will be concern over hitting tank bottoms," ING strategists Warren Patterson and Wenyu Yao said on Thursday, commenting on the inventory report.
"The tightness at the WTI delivery hub has been reflected in the prompt WTI timespread. The spread briefly broke above US$2/bbl earlier this month - the first time since 2018," they added.
OPEC also added some support to oil prices after it said on Thursday that there is an upside potential in global oil demand as stronger economic growth and the easing of COVID restrictions make the near-term prospects for global oil demand bright.
"As most world economies are expected to grow stronger, the near-term prospects for world oil demand are certainly on the bright side," OPEC said in its monthly report today.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More