NEW YORK: Oil prices surged about 3% on Wednesday, bolstered by record US crude exports and as the nation’s refiners operated at higher-than-usual levels for this time of year.
Brent crude futures were up $2.43, or 2.6%, to $95.95 a barrel by 12:31 p.m. EDT (1631 GMT). US West Texas Intermediate (WTI) crude rose $2.86, or 3.3%, to $88.18.
A weaker US dollar also added to bullishness, making oil cheaper for holders of other currencies.
US crude stocks rose 2.6 million barrels last week, according to weekly government data, more than anticipated, but that was lower than industry figures, which showed a 4.5 million-barrel build.
In addition, crude exports rose to 5.1 million barrels a day, the most ever, dropping US crude imports on net to their lowest in history.
“Overall, thanks to the export market, this turns into a bullish report despite a medium-sized build in commercial crude inventories,” said John Kilduff, partner at Again Capital in New York.
Traders attributed the surge in exports to the widened WTI-Brent spread, which, coming into Wednesday’s trade, was at more than $8 per barrel.
US refining rates also remained high at nearly 89% of capacity, their highest since 2018, and more than usual for this time of year.
Traders have been concerned about the supply outlook, so the US figures were a catalyst for more buyers to jump into the market.
Oil analysts anticipate tighter supply in coming months after the Organization of the Petroleum Exporting Countries surprised markets with a larger-than-expected cut to its output targets earlier this month and in advance of a Dec. 5 European ban on oil imports from Russia.
“OPEC production cuts effective November and the new EU sanctions on Russian oil to be enforced from December should be positive” for prices, said Stephen Innes, managing partner at SPI Asset Management.
Saudi Energy Minister Prince Abdulaziz bin Salman warned on Tuesday that energy stockpiles were being used as a mechanism to manipulate markets.
Saudi Aramco’s CEO said there were many uncertainties ahead of planned European embargoes on crude and refined products from Russia, a member of the OPEC+ alliance led by Saudi Arabia, adding that Russian oil is still finding buyers.
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