SINGAPORE: Oil prices gained for a second session on Thursday, supported by worries over supply amid US sanctions on Russia, a larger-than-forecast fall in US crude oil stocks, and an improving global demand outlook.
Brent crude futures rose 25 cents, or 0.3%, to $82.28 per barrel by 0446 GMT, after rising 2.6% in the previous session to their highest since July 26 last year.
US West Texas 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.
US crude oil stocks fell last week to their lowest since April 2022 as exports rose and imports fell, the Energy Information Administration (EIA) said on Wednesday.
The 2 million-barrel draw was more than the 992,000-barrel fall analysts had expected in a Reuters poll.
The drop added to a tightened global supply outlook after the US imposed broader sanctions on Russian oil producers and tankers.
The new US sanction measures have sent Moscow’s top customers scouring the globe for replacement barrels, while shipping rates have surged too.
The Biden administration on Wednesday imposed hundreds of additional sanctions targeting Russia’s military industrial base and evasion schemes.
Meanwhile, the Organization of the Petroleum Exporting Countries and its allies, which have been curtailing output collectively over the past two years, are likely to be cautious about increasing supply despite the recent price rally, said Commodity Context founder Rory Johnston.
Oil rises as traders assess sanctions impact
“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,” Johnston 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.
On the demand front, global oil expanded by 1.2 million barrels per day in the first two weeks in 2025 from the same period a year earlier, slightly below expectations, JPMorgan analysts wrote in a note.
The analysts expect 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 festival gathering is taking place, as well as by travel for Lunar New Year celebrations in China at the end of January.
Some investors are also eying potential interest rate cuts by the US Federal Reserve before the end of the year following data on an easing in core US inflation - which could lend support to economic activities and energy consumption.
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