WTI jumps 3% as US crude stocks fall 8.6 million barrels
WTI crude closes at US$97.97 after a sharp US inventory draw, while markets weigh possible easing of sanctions on shadow-fleet tankers.
US crude oil prices jumped more than 3% on Thursday after government data showed a much larger-than-expected fall in inventories, while traders assessed possible moves by Washington to ease sanctions on some vessels in the global “shadow fleet”.
West Texas Intermediate (WTI) crude for November delivery rose US$2.88, or 3.03%, to settle at US$97.97 a barrel on October 15.
Brent crude for December delivery moved in the opposite direction, edging down 14 cents, or 0.13%, to US$105.92 a barrel.
US crude inventories fall 8.6 million barrels
The US Energy Information Administration (EIA) reported that commercial crude inventories fell by 8.6 million barrels to 415.6 million barrels in the week ending October 9.
The decline was far larger than the 288,000-barrel draw expected by analysts in a Reuters poll.
Distillate stocks, which include diesel and heating oil, dropped by about 2.5 million barrels to 102.6 million barrels.
Gasoline inventories, however, rose by about 3.5 million barrels to 208.3 million barrels.
The sharp crude draw helped support WTI prices despite uncertainty over the broader global supply outlook.
US weighs easing some shadow-fleet sanctions
Investors are also watching reports that the administration of US President Donald Trump is considering removing sanctions from some vessels in the so-called shadow fleet.
The tankers have previously transported oil or petroleum products linked to sanctioned countries including Russia, Iran and Venezuela.
The proposal is aimed at lowering record global tanker freight rates by allowing some previously sanctioned vessels to return to legitimate commercial shipping.
A US official said the discussions centre on allowing the vessels to carry “legal oil”, meaning crude and petroleum products that are not subject to US sanctions.
The measure would not authorise the transport of sanctioned Russian or Iranian oil.
Companies seeking to acquire sanctioned vessels would need approval from the US Treasury Department, with cases reviewed individually.
The discussions follow Trump’s temporary lifting of sanctions on Russian diesel, a move criticised by Ukrainian President Volodymyr Zelenskyy, European governments and some Republican senators in the United States.
Middle East tensions keep risk premium high
Oil markets remain supported by geopolitical risks as fighting between Saudi Arabia and Yemen’s Houthis intensifies and attacks on commercial shipping around the Strait of Hormuz increase.
Two commercial vessels sank near the strategic waterway after being struck by projectiles in separate incidents, adding to concerns over the security of a key route for global energy shipments.
The continuing Middle East tensions have helped maintain a geopolitical risk premium in crude prices despite efforts to increase market supply.
IEA to accelerate diesel stock release
The International Energy Agency (IEA) said its 32 member countries had agreed to accelerate the release of emergency oil stocks, including more than 20 million barrels of diesel.
The diesel is to be released as soon as possible as governments seek to ease record fuel prices and supply pressures caused by conflicts in the Middle East and Ukraine.
The move forms part of the emergency action agreed in March, when IEA members pledged to release more than 400 million barrels of crude oil and petroleum products.
About 330 million barrels have been released so far.
The IEA said members would accelerate the remaining volumes and that total releases would ultimately exceed the original 400-million-barrel commitment.
The more than 20 million barrels of diesel therefore represent an acceleration of existing commitments rather than an entirely separate new release.
Spain has said it will release 4.4 million barrels from its strategic reserves in October.
The IEA did not set a single timetable for all countries, saying releases would proceed in line with individual national circumstances.
Oil markets are therefore balancing a sharp decline in US inventories and continued geopolitical risks against efforts to increase emergency supplies and potentially expand the pool of tankers available for legitimate oil shipments.
