The front-month contract for Brent crude North Sea oil was last seen up USD 0.35 at USD 79.56/bbl, while the WTI equivalent was USD 0.34 higher on the day at USD 74.20/bbl.
The Brent crude benchmark has climbed around 3% this week, although it remains within a USD 74-85/bbl trading band seen since the start of the year.
“Crude oil edged higher amid signs of stronger demand,” analysts at ANZ bank said, citing US data late on Wednesday that showed an unexpected fall in the nation’s gasoline inventories. Also, they pointed to US crude exports reaching a record 4.06m bbl/day last year, up 13% from 2022.
“Both indicate stronger demand for crude. However, the gains were capped by an unexpected rise in commercial crude oil inventories,” the ANZ analysts added in a note.
US commercial crude oil inventories rose by 5.5m barrels last week to 427.4m barrels, which is around 4% below the five-year average for this time of year, said the US Energy Information Administration.
This build in commercial crude inventories “was driven by a rebound in crude oil imports”, said analysts at ING bank, regarding a week on week increase of 1.3m bbl/day, while exports fell by almost 0.3m bbl/day.
At the same time, total US motor gasoline stockpiles fell by 3.1m barrels last week and are about 1% below the five-year average.
The US also remains the world’s biggest producer of oil, with production rising 0.3m to 13.3m bbl/day in the week ending 2 February.
Middle East tensions
Robust production in the US has helped somewhat to offset concerns about potential supply disruptions in the Middle East, which accounts for around a third of global seaborne oil trade.
Israel’s war on Palestinian militant group Hamas in Gaza has sparked tensions in other parts of the region, with Iran-backed Houthi rebels in Yemen attacking international shipping in the Red Sea since November. The US and UK have launched retaliatory strikes on key Houthi targets and other Iran-linked militant sites in the region.
“Further attacks by Houthi rebels on ships in the Red Sea kept traders on edge over supply disruptions. The US has also vowed more strikes against Iranian forces and their proxies in the region,” ANZ bank analysts said, adding that “some concerns were offset by ongoing talk of a ceasefire in the Israel-Hamas war”.
However, Benjamin Netanyahu, Israel’s prime minister, rejected on Wednesday demands laid out by Hamas in response to an Israel-backed ceasefire proposal. “Total victory” in Gaza “is within reach”, he told a televised news conference.