Oil gains 3% on global economic optimism, despite surprise U.S. crude build  

 

  • Oil prices rose 3% to a one-week high on Wednesday as hopes for an improved global economic outlook and concern over the impact of sanctions on Russian crude output outweighed a massive surprise build in U.S. crude stocks. Much of the market's optimism was pinned on top oil importer China's reopening of its economy after the end of strict COVID-19 curbs.
  • Brent futures rose $2.46, or 3.1%, to $82.56 a barrel by 1:14 p.m. EST. U.S. West Texas Intermediate (WTI) crude rose $2.33, or 3.1%, to $77.45. That put both benchmarks on track to close the day at their highest since Dec. 30 with WTI up for a fifth day in a row for the first time since October 2022 and Brent up for a third day in a row for the first time since December 2022.
  • The U.S. Energy Information Administration (EIA) said crude inventories jumped by 19.0 million barrels last week, the third biggest weekly gain ever and the most since stocks rose by a record 21.6 million barrels in Feb 2021. Last week's increase came as refiners were slow to restore production after a cold freeze shut operations in late 2022. That compares with the 2.2 million-barrel decline in crude stocks that analysts forecast in a Reuters poll and industry data from the American Petroleum Institute (API), showing a 14.9 million-barrel build.
  • An international price cap imposed on sales of Russian crude took effect on Dec. 5 and more curbs aimed at product sales are set to come into force next month as the European Union keeps working on more sanctions against Moscow over the invasion of Ukraine. Russian Deputy Prime Minister Alexander Novak said the country's oil producers have had no difficulties in securing export deals despite Western sanctions and price caps.
  • EIA said the upcoming EU ban on seaborne imports of petroleum products from Russia on Feb. 5 could be more disruptive than the December 2022 EU ban. EIA also forecast that U.S. crude production will reach all-time highs in 2023 and 2024.

(Source: Reuters)