Oil rises as US inventory decline heightens supply concerns
Shafaq News/Oil prices gained for a second session on Thursday, supported by worries oversupply amid U.S. sanctions on Russia, a larger-than-forecast fall in U.S. crudeoil stocks, and an improving global demand outlook.
Brent crudefutures rose 25 cents, or 0.3%, to $82.28 per barrel by 0446 GMT, after rising2.6% in the previous session to their highest since July 26 last year.
U.S. WestTexas Intermediate crude futures rose 28 cents, or 0.4%, to $80.32 a barrel,after gaining 3.3% on Wednesday to their highest since July 19.
U.S. crudeoil stocks fell last week to their lowest since April 2022 as exports rose andimports fell, the Energy Information Administration (EIA) said on Wednesday.
The 2million-barrel draw was more than the 992,000-barrel fall analysts had expectedin a Reuters poll.
The dropadded to a tightened global supply outlook after the U.S. imposed broadersanctions on Russian oil producers and tankers. The new U.S. sanction measureshave sent Moscow's top customers scouring the globe for replacement barrels,while shipping rates have surged too.
The Bidenadministration on Wednesday imposed hundreds of additional sanctions targetingRussia's military industrial base and evasion schemes.
Meanwhile,the Organization of the Petroleum Exporting Countries and its allies, whichhave been curtailing output collectively over the past two years, are likely tobe cautious about increasing supply despite the recent price rally, saidCommodity Context founder Rory Johnston.
"Theproducer group has had its optimism dashed so frequently over the past yearthat it is likely to err on the side of caution before beginning the cut-easingprocess," Johnston said.
Limitingoil's gains, Israel and Hamas agreed to a deal to halt fighting in Gaza andexchange Israeli hostages for Palestinian prisoners, according to an official.
On thedemand front, global oil expanded by 1.2 million barrels per day in the firsttwo weeks in 2025 from the same period a year earlier, slightly belowexpectations, JPMorgan analysts wrote in a note.
The analystsexpect oil demand to grow by 1.4 million bpd year-on-year in coming weeks,driven by heightened travel activities in India, where a huge festivalgathering is taking place, as well as by travel for Lunar New Year celebrationsin China at the end of January.
Someinvestors are also eying potential interest rate cuts by the U.S. FederalReserve before the end of the year following data on an easing in core U.S.inflation - which could lend support to economic activities and energyconsumption.
(Reuters)
