Oil Prices Soar on US Inventory Drop

16 Jan 2025 , 09:56 AM

After a more significant than anticipated drop in U.S. crude oil inventories fueled supply worries sparked by U.S. sanctions against Russian energy trade, oil prices increased for a second day on Thursday.

In the previous session, Brent oil futures increased 2.6% to its highest level since July 26 and then climbed 30 cents, or 0.4%, to $82.33 a barrel. After rising 3.3% on Wednesday, U.S. West Texas Intermediate oil futures increased 32 cents, or 0.4%, to $80.36 a barrel, the highest level since July 19.

After the U.S. Energy Information Administration said on Wednesday that domestic crude oil supplies had dropped for the seventh consecutive week, the longest losing run since July 2021, prices increased.

Fresh U.S. sanctions on Russian oil producers and tankers have caused Moscow’s major clients to search the world for replacement barrels, and shipping costs have also increased. As a result, global crude oil supplies are predicted to become scarcer in the coming months.

In its monthly oil market report released on Wednesday, the International Energy Agency warned that the most recent round of sanctions could seriously impair the supply and distribution of Russian oil.

According to an official, Israel and Hamas reached an agreement to stop fighting in Gaza and swap Israeli captives for Palestinian detainees, limiting the revenues from oil.

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