Brent futures for May rose by 19 cents, or 0.23%, reaching $84.22 per barrel
Oil prices in Asia saw a slight increase on Thursday due to strong demand in the U.S. following a decrease in gasoline stocks and unexpected drops in crude stockpiles. Concerns about supply remained after Ukrainian attacks on Russian refineries.
At 0347 GMT, Brent futures for May rose by 19 cents, or 0.23%, reaching $84.22 per barrel. Additionally, April U.S. West Texas Intermediate (WTI) crude increased by 15 cents, or 0.19%, reaching $79.87 per barrel. Both contracts had reached a four-month high on Wednesday due to the optimistic U.S. demand outlook and increased geopolitical risk.
Strong US products exports led gasoline stock to drop to a three-month low. Rising gasoline prices are supporting crack spread for refiners. Market also reacted to growing geopolitical risks after a Ukrainian drone attacked a Russian refinery, ANZ analysts stated in a client note.
The Energy Information Administration (EIA) reported that U.S. gasoline inventories fell for the sixth consecutive week, dropping by 5.7 million barrels to 234.1 million barrels, which was triple the expected draw of 1.9 million barrels.
Motor fuel stocks at the U.S. Gulf Coast reached their lowest level since November 2022, while finished motor gasoline supplied, which serves as a demand indicator, increased by 30,000 barrels per day to over 9 million bpd for the first time this year. Unexpectedly, U.S. crude oil stockpiles also decreased as processing increased.
In terms of demand, the U.S. purchased approximately 3.25 million barrels of oil for the Strategic Petroleum Reserve, scheduled for delivery in August.
Meanwhile, Ukrainian drone strikes on Russian refining facilities continued for a second day, resulting in a fire at Rosneft’s largest refinery and posing a significant threat to Russia’s energy sector. Additionally, concerns about crude output in March, given the increase in February, limited the rise in prices.
However, supply side developments are not price supportive, with OPEC+ production for February showing weaker compliance. Iraq remained non-compliant for the second month, said ANZ analysts.
