Oil prices increased on Thursday on mounding supply force concerns among disruptions to Russian exports, the probable for major producers to cut output, and the limited closure of a U.S. refinery. Brent crude increased 59 cents, or 0.6%, to $101.81 a barrel, while U.S. West Texas in-between crude was up 42 cents, or 0.4%, at $95.31 a barrel.
Both crude oil benchmark contracts touched three-week highs on Wednesday after the Saudi energy minister flagged the possibility that the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, will cut production to support prices.
“Brent crude oil prices glance above the $100/barrel mark retinue Saudi officials showing desire to keep prices via an OPEC+ production cut if essential,” Citi analysts said in a note.
Dropping U.S. crude and product stocks also added to the higher pressure on prices. Oil inventories fell by 3.3 million barrels in the week to Aug 19 at 421.7 million barrels, steeper from analysts’ expectations in a Reuters poll for a 933,000-barrel decline. The bullish impact was countered by a drawdown in gasoline inventories that was less than expected, reflecting tepid demand.
U.S. gasoline stocks fell by 27,000 barrels in the week to 215.6 million barrels, different from earlier hope for a 1.5 million-barrel drop. Overall U.S. gasoline demand dropped in the most recent period, leaving the four-week average of daily gasoline products supplied 7% below the year-earlier period.