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Crude oil prices rose Thursday as the U.S. reported a surprise weekly draw in domestic commercial crude supplies and extreme cold weather disrupted production.
The U.S. Energy Information Administration reported a larger than expected 2.5M-barrel draw in crude inventories, setting aside fears of another large build of total inventories.
Also, ~40% of North Dakota’s oil production remained shut-in because of the cold weather.
Meanwhile, the International Energy Agency raised its 2024 global oil demand growth forecast for the third time in as many months, now anticipating global consumption will rise by 1.24M bbl/day.
But the updated projection was well below OPEC’s forecast, issued Wednesday, for 2.25M bbl/day demand growth this year.
Global oil markets look “reasonably well supplied in 2024, with higher than expected non-OPEC+ production increases set to outpace oil demand growth by a healthy margin,” the IEA said in its latest report.
Front-month Nymex crude (CL1:COM) for February delivery finished +2.1% to $74.08/bbl for its best gain in two weeks, and front-month March Brent crude (CO1:COM) closed +1.5% to $79.10/bbl, its highest settlement value YTD.
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Among individual names: Devon Energy (DVN) fell for the eighth straight session to its lowest level since December 2021, while Exxon Mobil (XOM), Chevron (CVX) and APA Corp. (APA) all posted new 52-week intraday lows.
Oil prices have been range-bound so far this year despite the Israel-Hamas conflict and attacks on shipping in the Red Sea.
“The turmoil in the Mideast has kicked up freight and insurance rates appreciably but [has] not yet affected total global oil supply other than delaying shipments toward Europe and other regions,” said Jim Ritterbusch, president of Ritterbusch and Associates.
