Global supply concerns push oil prices higher as crude stocks drop

SINGAPORE: Oil prices rose for a second day on Thursday after a larger-than-expected decline in US crude oil stockpiles added to supply concerns stoked by US sanctions against Russian energy trade.

Brent crude futures rose 30 cents, or 0.4 per cent, to $82.33 per barrel by 0120 GMT, after rising 2.6 per cent to its highest since July 26 in the previous session. US West Texas Intermediate crude futures rose 32 cents, or 0.4 per cent, to $80.36 a barrel after gaining 3.3 per cent on Wednesday, reaching its highest since July 19.

Prices rose after the US Energy Information Administration reported on Wednesday domestic crude oil stocks fell for the seventh time in a row last week, the longest declining streak since July 2021.

Global crude oil supplies are expected to tighten in the months ahead as fresh US sanctions on Russian oil producers and tankers have sent Moscow’s top customers scouring the globe for replacement barrels, while shipping rates have surged too.

The latest round of sanctions could disrupt Russian oil supply and distribution significantly, the International Energy Agency said in its monthly oil market report on Wednesday.

The Organization of Petroleum Exporting Countries and its allies, which have been curtailing output over the past two years, are likely to be cautious about increasing supply despite the recent rally in prices, said Commodity Context founder Rory Johnston.

“The producer group has had its optimism dashed so frequently over the past year that it is likely to err on the side of caution before beginning the cut-easing process,” he said.

Limiting oil’s gains, Israel and Hamas agreed to a deal to halt fighting in Gaza and exchange Israeli hostages for Palestinian prisoners, according to an official.

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