Oil prices rise on US crude draws, tight global supply and Rosebank announcement

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Chief executive Paul Weir said his company's cash could double once the pipeline is turned back on
Chief executive Paul Weir said his company's cash could double once the pipeline is turned back on

 Oil prices rose in early Asian trade on Thursday after surging to the highest settlement in 2023 in the previous session as a steep drop in U.S. crude stocks added to worries of tight global supplies.

Brent crude LCOc1 futures climbed 16 cents to $96.71 a barrel by 0001 GMT.

U.S. West Texas Intermediate crude futures (WTI) rose 20 cents to $93.88.

U.S. crude stocks fell by 2.2 million barrels last week to 416.3 million barrels, government data showed, far exceeding the 320,000-barrel drop analysts expected in a Reuters poll.

This comes after Britain signalled final approval for the UK’s largest untapped oil field, Rosebank, yesterday, which sent oil shares soaring.

Crude stocks at the Cushing, Oklahoma, storage hub, delivery point for U.S. crude futures, fell by 943,000 barrels in the week to just under 22 million barrels, the lowest since July 2022, data showed.

Stockpiles at Cushing have been falling closer to historic low levels due to strong refining and export demand, prompting concerns about quality of the remaining oil at the hub and whether it will fall below minimum operating levels.

The crude draws follow production cuts of 1.3 million barrels a day to the end of the year by Saudi Arabia and Russia of the Organization of the Petroleum Exporting Countries and allies known as OPEC+.

President Vladimir Putin ordered his government to ensure retail fuel prices stabilise after a jump caused by an increase in exports.

In response, his deputy prime minister cited proposals to restrict exports of oil products purchased for domestic use, adding to market tightness.

Laura Sanicola – Reuters