MOSCOW (MRC) -- Oil prices rose sharply on Thursday, extending a rally from the previous session, on escalating unrest in OPEC+ oil producer Kazakhstan and supply outages in Libya, reported Reuters.
Global benchmark Brent crude futures rose USD1.78, or 2.2%, to USD82.58 a bbl by 1445 GMT, the highest since late November. US West Texas Intermediate (WTI) crude futures gained USD2.18, or 2.8%, to USD80.03, the highest since mid-November.
Brent's six-month backwardation stood at about USD4 a bbl, its widest since late November. Backwardation is a market structure where current prices trade at a premium to future prices and is usually a sign of a bullish market.
Russia sent paratroopers into Kazakhstan on Thursday to help quell a countrywide uprising after deadly violence spread across the tightly controlled former Soviet state.
"The political situation in Kazakhstan is becoming increasingly tense," Commerzbank said. "And this is a country that is currently producing 1.6 MM bbl of oil per day."
There were no indications that oil production has been affected so far.
Libyan oil output is at 729,000 bpd, the National Oil Corp said on Thursday, down from a high of more than 1.3 MMbpd last year, owing to maintenance and oilfield shutdowns.
Prices rallied despite a surge in US fuel stocks a week earlier. US crude oil stockpiles fell lin early January while gasoline inventories surged by more than 10 MM bbl, the biggest weekly build since April 2020, as supplies backed up at refineries because of reduced fuel demand.
OPEC+, a group that includes members of the Organization of the Petroleum Exporting Countries, Russia and other producers, agreed on Tuesday to add another 400,000 bpd of supply in February, as it has done each month since August.
As MRC informed before, US commercial crude stocks fell 3.48 million barrels to 413.96 million barrels in the week ended Sept. 17, to more than 8% below the five-year average, Energy Information Administration data showed. Stocks were last lower Oct. 5, 2018.
We remind that in late August, 2021, US crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said. Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.
We also remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, EIA said in a monthly report earlier last year, a smaller decline than its previous forecast for a drop of 210,000 bpd.