WTI (West Texas Intermediate) oil prices have significantly increased last week, reaching $97.58 per barrel by Thursday. This price increase occurred due to a notable decrease of 8.6 million barrels in crude oil inventory in the U.S. for the week ending October 9. Analysts had expected the inventory reduction to be only 288,000 barrels, indicating a market surprise.
Details of Crude Oil Inventory and Product Demand
The total commercial crude oil inventory in the U.S. after this decrease reached 415.6 million barrels, which is still 3 percent above the five-year average. However, this decrease has put more pressure on the market and encouraged buyers to purchase WTI oil. Additionally, diesel inventories have decreased by 2.5 million barrels and are 12 percent below the five-year average. In contrast, gasoline inventories have faced an increase of 3.5 million barrels.
Read more: Brent Oil Price Fluctuations Due to Increased Supply Risks
In the past four weeks, total petroleum product demand has averaged 21.1 million barrels per day, which is a 2 percent increase compared to last year. Gasoline demand has averaged 8.7 million barrels per day, and diesel demand has averaged 4.0 million barrels per day, which has slightly decreased.
Risks in the Strait of Hormuz and Their Impacts
The Strait of Hormuz continues to be recognized as the largest supply risk for the oil market. On Wednesday, a container ship and a cargo ship sank near this waterway due to missile attacks. Iran has stated that it will continue its attacks in response to American blockades and tougher sanctions. Additionally, Saudi-Houthi conflicts and Ukrainian attacks on Russian oil facilities in the Ryazan region have impacted the oil market.
However, these events have not significantly increased Brent oil prices. Instead, these occurrences have led traders to not view supply-related events as entirely negative. Energy infrastructure has not been attacked in recent days, which is currently significant.
The International Energy Agency (IEA) also decided on Thursday to accelerate the release of remaining volumes from the collective action of March, announcing that over 20 million barrels of diesel will soon be released. Various countries had promised to release over 400 million barrels of crude oil and petroleum products last March, of which about 330 million barrels have been released so far.
Ultimately, WTI oil prices are currently rising due to these factors and strong demand, and it is expected that if support at $94.28 is maintained, it may reach a record high of $101.69.
Read more: BP and TotalEnergies Increase Their Investment in the U.S. · New Tactics of the Revolutionary Guard in the Strait of Hormuz to Control Ships
