NEW YORK: Oil prices rose on Thursday after data showed US crude stockpiles fell more than expected last week and a fresh attack by Houthi forces on ships off Yemen’s coast underscored the peril facing trade in a key global transit route.
Brent crude futures were up $1.29, or 1.6%, to $81.33 a barrel at 1521 GMT , while US West Texas Intermediate crude was up $1.37, or 1.8%, to $76.46 a barrel.
US crude stockpiles tumbled by 9.2 million barrels last week, the Energy Information Administration said, while analysts in a Reuters poll had expected a 2.2 million-barrel draw.
The draw was driven by a stark drop in US crude imports as winter weather shut in refineries and kept motorists off the road. Geopolitical tensions in the Middle East remained in focus. In the latest blow to shipping around the key Red Sea corridor, Maersk said explosions nearby forced two ships operated by its US subsidiary and carrying US military supplies to turn around when they were transiting the Bab al-Mandab Strait off Yemen, accompanied by the US Navy.
On Thursday, Yemen’s Houthi leader vowed to continue targeting ships linked to Israel until aid reaches the Palestinian people in Gaza. “We are finally seeing energy markets wake up to the distinct possibility that these supply chain disruptions will rumble on for months yet,” said Joshua Mahony, chief market analyst at Scope Markets. “The prospect of a military solution to ensure safe passage looks unlikely.” Oil prices also drew support from hopes for China’s economic recovery.
China’s central bank announced a deep cut in bank reserves on Wednesday, in a move that will inject about $140 billion of cash into the banking system and send a strong signal of support for a fragile economy and plunging stock markets. However, elsewhere, the spectre of sustained high interest rates loomed large.
Data on Thursday showed the US economy grew at a faster pace than expected in the fourth quarter, suggesting the Federal Reserve would be in no rush to cut interest rates.
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