Oil prices experienced gains in early trading on Thursday, bolstered by robust demand in the U.S. following a decrease in gasoline stocks to a three-month low and an unexpected drop in crude inventories. Supply worries persisted after Ukrainian attacks targeted Russian refineries.
In early trade, Brent futures for May increased by 11 cents, or 0.13%, reaching $84.14 a barrel at 0652 GMT, while April U.S. West Texas Intermediate (WTI) crude rose by 10 cents, or 0.13%, to $79.82 per barrel.
Both contracts had surged around 3% to reach a four-month high on Wednesday, driven by the optimistic U.S. demand outlook and heightened geopolitical risks.
ANZ analysts highlighted that strong U.S. product exports led to a decline in gasoline stocks to a three-month low. Rising gasoline prices supported refiners’ crack spread, while the market reacted to increased geopolitical risks following Ukrainian drone attacks on a Russian refinery.
According to the Energy Information Administration (EIA), U.S. gasoline inventories decreased for the sixth consecutive week, falling by 5.7 million barrels to 234.1 million barrels, significantly surpassing expectations for a 1.9 million-barrel draw.
Moreover, U.S. crude oil stockpiles also declined unexpectedly as processing increased.
On the demand side, the U.S. purchased approximately 3.25 million barrels of oil for its Strategic Petroleum Reserve for August delivery.
Supply concerns persisted due to Ukrainian drone strikes on Russian refining facilities, causing a fire at Rosneft’s largest refinery. This event marked one of the most significant attacks against Russia’s energy sector in recent months.
Looking ahead, senior market analyst at OANDA Kelvin Wong suggested that the recent rise in oil prices could lead to consolidation around the resistance zone of $80.55 to $81.65 per barrel for WTI crude, especially with the upcoming risk event of the outcome of the Fed’s FOMC meeting on March 20.
In Ryazan, a drone attack sparked a fire at Rosneft’s refinery, forcing the shutdown of two primary oil refining units, according to sources familiar with the situation.