For much of the week, it has been headlines regarding the Middle East that has been driving advances in the price of oil, but today’s draw in US supplies is providing further support.
US light crude oil futures for October were up 0.84% at $108.11 a barrel towards the end of the New York trading session.
The price had been up as much as 1.2% earlier in the day, following the release of the weekly petroleum status report from the Energy Information Administration. The EIA said that US crude oil inventories declined by 1.84 million barrels last week to 360.2 million.
The lion’s share of the decrease was at Cushing, Oklahoma, which is the price settlement point for West Texas Intermediate (WTI) futures. Supplies there fell by 1.83 million barrels last week, taking the total level to 34.8 million, the lowest since February 2012.
Pipeline development has helped ease the glut at Cushing, as well as refineries operating at high rates: capacity utilisation at refineries increased 0.5% last week. This is the time of year when the US driving season is coming to an end and we would normally expect to see run rates start to drop off, so we may well see demand from refineries start to slacken in the next few weeks.