U.S. benchmark crude gained over $2 on Thursday as U.S. crude inventories tightened and OPEC+ vowed to keep the output cut status quo as tensions continued to flare in the Middle East and Russia-Ukraine.
At 4:23 p.m. ET on Thursday, U.S. crude benchmark West Texas Intermediate (WTI) trading up 2.05% at $83.02, while global benchmark Brent crude was trading up 1.61% at $87.48.
WTI has gained 14% so far this year.
This week's inventory data from the Energy Information Administration (EIA) showed a U.S. crude oil stockpile build of 3.2 million barrels, compared to the previous week's draw of 2 million barrels. In both cases, the data showed a draw in gasoline inventories, helping to support oil prices.
That data, released on Wednesday, put downward pressure on oil prices initially. However, after some time to digest the data, which analysts said was a smaller increase than anticipated for this time of year, prices shifted into rally mode.
"We ... expect U.S. inventories to rise less than normal in reflection of a global oil market in a slight deficit," Reuters quoted SEB analyst Bjarne Schieldrop as saying. "This will likely hand support to the Brent crude oil price going forward."
Also putting upwards pressure on oil prices is the continued intensification of the Russia-Ukraine conflict, which has focused most recently on energy infrastructure.
A Ukrainian drone attack last week on a Russian refinery operated by state-run Rosneft has resulted in a production shutdown after damage to the refinery's crude processing capacity.
Ukraine has stepped up attacks on oil refineries in Russia in recent weeks, which have reduced Russian refining capacity, and which, reportedly, have the White House concerned about rising international prices.
Ukrainian drone attacks on Russian refineries in recent weeks have taken out as much as 600,000 barrels in daily processing capacity in Russia.
On Thursday, JP Morgan suggested that oil prices could rise further, pointing to Russia's decision to impose additional curbs on production.
"Russia's actions could push Brent oil price to $90 already in April, reach mid-$90 by May and close to $100 by September," they wrote in a note, as quoted by Investing.com.
OPEC is meeting again next week and expectations are that it will leave its production policy unchanged.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com More