Oil prices up with US demand rise, supply risks amid geopolitical tension

By Zeynep Beyza Kilic

Oil prices increased on Thursday following data indicating increased demand in the US, the world's biggest oil consumer, and supply concerns stemming from the ongoing conflict in the Middle East.

International benchmark Brent crude traded at $84.31 per barrel at 10.57 a.m. local time (0757 GMT) for a 0.33% increase from the closing price of $84.03 a barrel in the previous trading session.

The American benchmark West Texas Intermediate (WTI) traded at $80.01 per barrel at the same time, a 0.36% rise from the previous session that closed at $79.72 per barrel.

US commercial crude oil inventories declined by 1.5 million barrels during the week ending March 8 against the market expectation of an increase of around 400,000 barrels, according to the Energy Information Administration (EIA).

Gasoline inventories also decreased by around 5.7 million barrels over the same period.

A drop in both crude and gasoline stocks signals a rise in demand in the US in support of higher prices.

In addition, the EIA revised up the price of Brent crude for 2024 and 2025, citing a decrease in global oil inventory in the near term.

The EIA expects tightening supplies to contribute to significant global oil inventory declines of around 900,000 barrels per day during the second quarter of the year.

Meanwhile, tension between Israel and Palestine and the Russia-Ukraine war are underpinning price upticks.

Israeli forces continue to bombard Gaza during Muslims' holy month of Ramadan, despite international efforts to establish a ceasefire.

Meanwhile, in Russia, Vasily Golubev, the governor of the Rostov region, stated on Telegram on Wednesday that an attack by a Ukrainian drone has shut down the largest oil refinery in the southern part of the country.

The official said the drones fell on the territory of the Novoshakhtinks refinery, which has an annual oil processing capacity of 7.5 million tons.

Later, the Russian Defense Ministry claimed on Wednesday that it struck a US Patriot air defense system and downed two military helicopters in Ukraine's Kharkiv region.