Oil up on Thursday

Oil surged following the largest daily increase in a month, propelled by a continuation of the three-week drawdown in US crude stockpiles. Brent approached $86 per barrel, rising 1.6 per cent on Wednesday, with West Texas Intermediate (WTI) topping $83.

Inventories fell by 4.87 million barrels last week to their lowest since February, below the five-year average. Throughout the year, oil has stayed higher due to OPEC+ cuts offsetting non-cartel production increases.

Anticipation of looser US monetary policy also boosted crude, weakening the dollar and enhancing commodity appeal. Strong near-term demand was indicated by widened time preads, with Brent’s prompt spread in backwardation over $1 per barrel, up from 80 cents a month ago.

Attribution: Bloomberg