Oil Prices Increase as US Crude Inventories Fall
Crude oil prices increased on Thursday on concerns over tight global supplies ahead of the winter months while data shows that US oil inventories fall. International benchmark Brent crude traded at $90.50 per barrel, an increase of 0.75% from the closing price of $89.83 a barrel in the previous trading session.
American benchmark West Texas Intermediate (WTI), trading at $83.52 per barrel at the same time, gained 0.70% after the previous session closed at $82.94 a barrel. Expectations of a rough winter and a global fuel shortage are pushing oil prices higher.
The Iran nuclear deal, which seems to have hit some problems, is contributing to supply concerns. The EU’s foreign policy chief Joseph Borrell said Tuesday that he does not expect a breakthrough in reviving the Iran nuclear deal this week.
Raising supply concerns, data released by the Energy Information Administration (EIA) on Wednesday showed that US commercial crude oil inventories increased by 1.1 million barrels during the week ending Sept. 16 to 430.8 million barrels, against the market expectation of a rise of around 2.32 million barrels.
Meanwhile, the rise in the US dollar limits oil price rises, making US-indexed crude oil more expensive for buyers using other currencies.
US Crude Oil Inventories Fall
US commercial crude oil inventories decreased by 1.2% during the week ending Nov. 11, according to data released by the Energy Information Administration (EIA) on late Wednesday.
Inventories declined by around 5.4 million barrels to 435.4 million barrels, against the market expectation of an increase of around 400 barrels.
Strategic petroleum reserves, excluded from commercial crude stocks, fell by 4.1 million barrels to 392.1 million barrels last week, the data revealed. Gasoline inventories increased by 2.2 million barrels to 207.9 million barrels over the same period.
Crude production increases
EIA data showed that US crude oil imports fell by 895,000 barrels per day (bpd) to around 5.55 million bpd during the week ending Nov. 11, while crude oil exports rose by around 341,000 bpd to 3.86 million bpd.
US crude oil production, meanwhile, increased by 2,000 bpd to approximately 12.54 million bpd over the same period. In the November Short-Term Energy Outlook (STEO), the EIA forecasted that crude oil output in the US would average 11.83 million bpd in 2022, up from 11.25 million bpd in 2021.
Crude oil output in the country in 2023 is forecast to reach 12.31 million bpd. READ: OPEC to Maintain Steady Flow of Energy Supplies# Oil Prices Increase as US Crude Inventories Fall