 "Crude oil prices rise 3%, breach $97 a barrel on US stockpile concern")
Oil prices surged 3 per cent to the highest settlement in 2023, after a steep drop in US crude stocks compounded worries of tight global supplies.
Brent crude futures closed up $2.59, or 2.8 per cent, at $96.55. It breached $97 a barrel during the session.
US West Texas Intermediate crude futures (WTI) climbed $3.29, or 3.6 per cent, to $93.68. The session high was over $94.
US crude stocks fell by 2.2 million barrels last week to 416.3 million barrels, government data showed, far exceeding the 320,000-barrel drop analysts expected in a Reuters poll.
Crude stocks at the Cushing, Oklahoma, storage hub, delivery point for US crude futures, fell by 943,000 barrels in the week to just under 22 million barrels, the lowest since July 2022, data showed.
“The market is being led up by storage numbers as we are getting to the minimum operational inventories at Cushing,” said Andrew Lipow, president of Lipow Oil Associates.
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Stockpiles at Cushing have been falling closer to historic low levels 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.
Prices fell last week but were rallying again as markets worried about tight supplies heading into winter, following production cuts of 1.3 million barrels a day to the end of the year by Saudi Arabia and Russia of the Organization of the Petroleum Exporting Countries and allies known as OPEC+.