Oil prices surged nearly 2% on Wednesday, buoyed by a drop in U.S. crude oil stockpiles and another round of Ukrainian attacks on Russian oil refineries, countering weakening prices earlier this week as demand worries sent traders to the exit.
At 11.44 a.m. ET on Wednesday, Brent crude was trading at $83.40, up 1.81%, while West Texas Intermediate (WTI) was trading at $79.05, up 1.92% on the day.
Despite the jump in prices Wednesday afternoon, Brent crude has not managed to break out of its range, with Reuters noting that the front-month contract has settled in a narrow range between $81.50-$84 a barrel for more than a month.
"While the geopolitical temperature has moved higher by a few degrees since December we have yet to experience any disruptions, and the market has concluded that such a risk is currently very low," Saxo Bank analyst Ole Hansen told Reuters.
Earlier on Wednesday, reports emerged of another attack on a Russian refinery in the Ryazan region, southeast of Moscow, causing a massive fire. The attack follows another attack that erupted in fire at a Lukoil refinery on Tuesday as Ukraine launches coordinated drone attacks targeting Russian oil facilities.
Related: How To Profit From Europe's $800 Billion Energy Crisis
The attacks are timed ahead of Russian presidential elections this weekend in which Vladimir Putin is running unopposed and set to win another six-year term in office.
On Tuesday, the American Petroleum Institute, API, reported a 5.5-million-barrel draw on U.S. crude oil inventories for the previous week, giving oil prices some fresh impetus amid concerns of soaring American output in the face of weak demand indicators, especially from China.
On Wednesday, the Energy Information Administration, EIA, followed that up with its inventory report showing a smaller draw of 1.5 million barrels for the week to March 8, with gasoline stocks also declining. Forecasts had expected a smaller, 1.3-million-barrel draw. This compares to a crude oil stockpile build the previous week of 1.4 million barrels.
By Tom Kool for Oilprice.com
More Top Reads From Oilprice.com:
Tom majored in International Business at Amsterdam’s Higher School of Economics, he is Oilprice.com's Head of Operations More