Oil Rises on Tight Supplies

Oil Rises on Tight Supplies
Pumpjacks are seen during sunset at the Daqing oil field in Heilongjiang Province, China, on Aug. 22, 2019. (Stringer/Reuters)

LONDON—Oil prices rose by more than $1 on Thursday in response to tighter supplies.

Brent crude futures rose $1.33, or 1.4 percent, to $93.74 a barrel at 1020 GMT.

U.S. West Texas Intermediate crude for November delivery, which expires on Thursday, rose $1.43, or 1.7 percent, to $86.98 per barrel. The WTI contract for December delivery was up 1.8 percent, or $1.51, at $86.03 a barrel.

China, the world's largest crude importer, has stuck to strict COVID-19 curbs this year, which weighed heavily on business and economic activity, lowering demand for fuel.

Looming European Union ban on Russian crude and oil products, as well as the output cut from the Organization of the Petroleum Exporting Countries and other producers including Russia, known as OPEC+, have also supported prices.

OPEC+ agreed on a production cut of 2 million barrels per day in early October.

Separately, U.S. President Joe Biden announced a plan on Wednesday to sell off the rest of his release from the nation's emergency oil reserve by year's end, or 15 million barrels of oil, and begin refilling the stockpile as he tries to dampen high gasoline prices ahead of midterm elections on Nov. 8.

The announcement, however failed to ease oil prices, as official U.S. data showed that U.S. SPR reserves last week fell to their lowest since mid-1984, while commercial oil stocks fell by more than expected.

"Yesterday's failed attempt at cooling oil prices is further evidence that the U.S. has lost its influence over global oil markets," Brennock said.

Meanwhile, global demand for fuel remains uncertain. U.S. economic activity expanded modestly in recent weeks, although it was flat in some regions and declined in a couple of others, the Federal Reserve said on Wednesday in a report that showed firms growing more pessimistic about the outlook.

By Ahmad Ghaddar
Related Topics