Oil increases on US crude drawdowns and limited supplies globally

28 Sep 2023 , 10:51 AM

After jumping to the highest settlement in 2023 the previous session, oil prices increased in early Asian trade on Thursday as concerns over a supply crunch around the world increased due to a sharp decline in U.S. crude stocks.

The price of Brent crude futures had increased by 16 cents to $96.71. WTI crude oil futures in the US increased by 20 cents to $93.88

According to official data, U.S. oil stocks decreased by 2.2 million barrels last week to 416.3 million barrels, well above the 320,000-barrel decrease economists predicted in a Reuters poll.

The delivery point for U.S. crude futures, Cushing, Oklahoma, saw a decline in crude stocks this past week of 943,000 barrels, bringing the total to just under 22 million barrels, the lowest level since July 2022, according to data.

Strong export and refining demand has caused Cushing stockpiles to approach historic low levels, raising questions about the quality of the remaining oil at the hub and whether it will remain above minimal operational levels.

The crude withdrawals come after Saudi Arabia and Russia, members of the OPEC+ organization and allies, reduced their daily production by 1.3 million barrels till the end of the year.

Following a spike brought on by a rise in exports, President Vladimir Putin instructed his government to ensure that retail fuel prices stabilize.

His deputy prime minister responded by citing plans to limit exports of oil products bought for domestic consumption, further tightening the market.

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