U.S. oil futures jumped to their highest in more than a year on Thursday as a drop in crude stocks in the United States added to worries over tight global supplies from OPEC+ output cuts.
U.S. West Texas Intermediate crude futures (WTI) rose above $95 per barrel earlier in the session for the first time since August 2022. They were last down 0.4% on the day at $93.29, however. Brent crude futures were down 55 cents to $96 a barrel after rising to the highest since November earlier in the session.
"The present move up is unequivocally led by scarce supply and actual inventory decline," said Tamas Varga of oil broker PVM.
U.S. crude stocks fell by 2.2 million barrels last week to 416.3 million barrels, government data showed, far eclipsing the 320,000-barrel drop analysts expected in a Reuters poll.
"Stocks are drawing while demand keeps growing. We are still far away from a price level causing demand destruction," said Stefano Grasso, a senior portfolio manager at 8VantEdge in Singapore.
Crude stocks at the Cushing, Oklahoma, storage hub that is the delivery point for U.S. crude futures fell by 943,000 barrels in the week to less than 22 million barrels, the lowest since July 2022, data showed.
Stockpiles at Cushing have been falling to near historic lows due to strong refining and export demand, prompting concerns about quality of the remaining oil at the hub and whether it will fall below minimum operating levels.
The crude draws follow combined voluntary cuts of 1.3 million barrels a day to the end of the year by Saudi Arabia and Russia, part of the group known as OPEC+ made up of the Organization of the Petroleum Exporting Countries (OPEC) and allies.
Russia's ban on fuel exports will not be lifted soon and will remain in place until the domestic market stabilises, the state-run TASS news agency reported on Thursday, citing Russian Energy Minister Nikolai Shulginov on Thursday.
Though Brent prices are nearing the $100 a barrel mark, "the narrative of higher-for-longer interest rates in the U.S. might dampen enthusiasm and could put a lid on prices," said Sugandha Sachdeva, executive director at Acme Investment Advisors.