Oil prices surge as Russia, Opec supply drop, US crude stocks decline

Oil prices rose on Wednesday as supplies from Russia and Opec members tightened while US crude oil stocks fell last week, market sources said, citing American Petroleum Institute figures.

Also supporting prices was an unexpected increase in US job openings pointed to expanding economic activity and consequent growth in oil demand. 

 

Brent crude was up 69 cents, or 0.90 per cent, at $77.74 a barrel at 0954 GMT. US West Texas Intermediate crude climbed 87 cents, or 1.17 per cent, to $75.12.

Oil output from the Organization of the Petroleum Exporting Countries fell in December after two months of increases, a Reuters survey showed. Field maintenance in the United Arab Emirates offset a Nigerian output hike and gains elsewhere in the group.

In Russia, oil output averaged 8.971 million barrels a day in December, below the country's target, Bloomberg reported citing the energy ministry.

"The buoyancy in oil prices comes against a background of reportedly lower crude exports out of Russia, as seaborne exports from western ports decline further relative to their October 2024 peak," said Harry Tchilinguirian, head of research at Onyx Capital Group.

Additionally Tchilinguirian said the upward momentum in prices was likely fuelled by constructive API figures showing a decline of about 4 million barrels in US crude stocks, despite sizable build-ups in gasoline and distillate inventories.

"The sanguine mood seems to persist as oil prices keep edging higher due to a combination of weather-related support, possible sanctions on Russia and hopes for a revival of Chinese demand," said Tamas Varga, an analyst with oil broker PVM.

Going forward, analysts expect oil prices to be on average down this year from 2024 due in part to production increases from non-Opec countries.

"We are holding to our forecast for Brent crude to average $76/bbl in 2025, down from an average of $80/bbl in 2024," BMI, a division of Fitch Group, said in a client note.