NEW YORK: Oil prices surged on Wednesday as US crude exports hit an all-time high and as the nation’s refiners operated at higher-than-usual levels for this time of year.
Brent crude futures for December were up $2.16, or 2.3%, at $95.68 a barrel as of 11:01 a.m. EDT (1501 GMT). US West Texas Intermediate (WTI) crude futures for December rose $2.58, or 3%, to $87.90.
A 0.9% drop in the US dollar also added to bullishness, making oil cheaper for holders of other currencies.
Traders have been concerned about the supply outlook, so the US figures were a catalyst for more buyers to jump into the market. Oil analysts anticipate tighter supply in coming months after the Organization of the Petroleum Exporting Countries surprised markets with a larger-than-expected cut to its output targets earlier this month and in advance of a Dec. 5 European ban on oil imports from Russia.
“OPEC production cuts effective November and the new EU sanctions on Russian oil to be enforced from December should be positive” for prices, said Stephen Innes, managing partner at SPI Asset Management.
Oil rises on weaker dollar and supply worry; trade choppy
US crude stocks rose by 2.6 million barrels, more than anticipated, but that was lower than Tuesday’s data from the American Petroleum Institute, which showed a 4.5 million barrel rise in US inventories. In addition, crude exports rose to 5.1 million barrels a day, the most ever, dropping US crude imports on net to their lowest in history.
“Overall, thanks to the export market, this turns into a bullish report despite a medium-sized build in commercial crude inventories,” said John Kilduff, partner at Again Capital in New York.
Traders attributed the surge in exports to the widened WTI-Brent spread, which, coming into Wednesday’s trade, was at more than $8 per barrel. Refining output also remains high at nearly 89% of capacity, more than usual for this time of year.
Saudi energy minister Prince Abdulaziz bin Salman warned on Tuesday that energy stockpiles were being used as a mechanism to manipulate markets.
Saudi Aramco’s CEO said there were many uncertainties ahead of planned European embargoes on crude and refined products from Russia, a member of the OPEC+ alliance led by Saudi Arabia, adding that Russian oil is still finding buyers.
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