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02 December 2023

Oil rises to $92 as US crude supplies drop

By Agencies



Oil rose towards $92 a barrel yesterday, extending the previous day’s bounce after crude stocks in top consumer the United States fell sharply and revived concerns of a winter supply shortfall.

Prices leapt more than $1 on Wednesday, ending a four-day retreat, after data showed that US crude oil inventories dropped 7.6 million barrels last week to 296.9 million, the lowest since February 2005.

US crude rose 68 cents to $91.92 a barrel, remaining in its recent $90-$95 range. London Brent crude rose 61 cents to $92.09.

The bullish impact of the US inventory data was muted by signs the decline was caused by slower imports after fog interrupted shipping in the US Gulf and an ice storm in the US heartland temporarily shut down major crude oil pipelines.

There was also a rise in stocks at Cushing, Oklahoma, the delivery point for Nymex crude futures.

“We’re not too excited: total stocks are still mid-range, draws have been mainly seasonal and imports will rebound,” Societe Generale said in a report.

US crude stocks have fallen about 16 per cent since late June, and are about nine per cent below a year ago, pressured in part by Opec output restraints, according to the US Energy Information Administration.

The price of US crude has retreated from a record high $99.29 hit a month ago as investors grow concerned that the worsening US economic outlook will erode demand.

A top Federal Reserve official said on Wednesday the US economy would be “very weak” for several more months, but added inflation is a worry and could mean tough monetary policy decisions next year.

Morgan Stanley became the latest bank to reveal the impact of the credit crisis, reporting a big fourth-quarter loss after writing off $9.4 billion (Dh34.5bn) of its exposure to mortgages and related securities. (REUTERS)