(Bloomberg) — Oil held the biggest gain in about five weeks after US crude stockpiles shrunk and Ukraine attacked another Russian refinery.
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West Texas Intermediate futures traded below $80 a barrel after jumping 2.8% on Wednesday. Brent was steady near $84 after posting the highest close in more than four months. US inventories dropped for the first time in seven weeks, including a fall at the hub in Cushing, Oklahoma.
Another Ukrainian drone strike on a Russian refinery heightened geopolitical tensions. The attack at Rosneft PJSC’s Ryazan plant near Moscow on Wednesday was the latest in a series of assaults on the nation’s processing facilities.
Crude is higher this year but prices remain in a tight trading band. Supply cuts from OPEC+ have been met with higher production from outside the group, while demand concerns in China persist. The International Energy Agency will provide a snapshot of the market in its monthly report later Thursday.
“OPEC supply cuts have enabled sustained inventory draws to continue from the end of 2023 into the first quarter of 2024,” supporting prices, said Neil Beveridge, senior analyst at Sanford C. Bernstein & Co. “With demand growth in 2024, markets look fairly balanced which supports our view that Brent could trade around $80 a barrel.”
Refined products, meanwhile, have been in focus with gains this year running ahead of crude’s slow-but-steady ascent. US gasoline futures are at the highest level in almost six months as fuel stockpiles decline.
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