Oil prices climbed about 2% to a two-week high on Wednesday, October 18, on a bigger-than-expected US storage draw and as rising tensions in the Middle East threaten to disrupt oil supplies from the region, with Iran calling for an oil embargo on Israel.
Brent futures rose $1.46, or 1.6 per cent, to $91.36 a barrel, while US West Texas Intermediate (WTI) crude rose $1.45, or 1.7 per cent, to $88.11. This put Brent on track for its highest close since September 29 and WTI on track for its highest close since October 3. Earlier in the session both benchmarks rose more than $3 a barrel, according to news agency Reuters.
Back home, on the Multi Commodity Exchange (MCX), crude oil futures due for a October 19 expiry, was last trading higher by 2.2 per cent at ₹7,350 per bbl, having swung between ₹7,255 and ₹7,500 per bbl during the session so far, against a previous close of ₹7,192 per barrel.
The U.S. Energy Information Administration (EIA) said energy firms pulled 4.5 million barrels of crude from stockpiles during the week ended October 13.
That was much higher than the 0.3 million barrel draw analysts forecast in a Reuters poll and in line with the 4.4 million barrel drop seen in data from the American Petroleum Institute (API), an industry group.
It was also the fourth crude storage decline in five weeks and compares with a 1.7 million barrel draw during the same week last year and a five-year (2018-2022) average build of 2.5 million barrels for this time of year.
The decline included a drop of 0.8 million barrels at the Cushing storage facility in Oklahoma to its lowest level since October 2014, prompting concerns about the quality of oil remaining in the tanks and what happens if the amount of oil falls below minimum operating levels.
Cushing is the delivery point for U.S. oil futures on the New York Mercantile Exchange.
Markets factored in risk premiums after hundreds of Palestinians were killed in a blast at a Gaza City hospital on Tuesday that Israeli and Palestinian officials blamed on each other.
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Updated: 18 Oct 2023, 10:27 PM IST