COM - U.S. crude oil climbs to 2023 highs driven by tightening supplies

2023-08-09 18:30:40 ET

U.S. benchmark crude oil climbed to its best settlement this year, supported by continued concerns over supplies that have ratcheted higher by the escalating war between Russia and Ukraine.

Prices maintained gains even after U.S. government data showed crude inventories rose by ~5M barrels last week, as investors focused on inventories of refined products that fell much more than expected.

Front-month Nymex crude ( CL1:COM ) for September delivery ended +1.8% to $84.40/bbl, its highest settlement value since November 16, while front-month October Brent crude ( CO1:COM ) closed +1.6% to $87.55/bbl, its best finish since January 23.

ETFs: ( NYSEARCA: USO ), ( BNO ), ( UCO ), ( SCO ), ( USL ), ( DBO ), ( DRIP ), ( GUSH ), ( USOI ), ( NRGU )

The S&P 500 energy sector ( XLE ) was the day's top performer, +1.2% .

The Energy Information Administration reported U.S. crude inventories rose by 5.9M barrels in the week ended August 4, but gasoline inventories tumbled by 2.7M barrels and stocks of distillates, which include heating oil and diesel fuel, fell 1.7M barrels.

Stockpiles at the key storage hub of Cushing, Oklahoma, have declined for five of the past six weeks.

The U.S. drawdowns helped ease some demand concerns after Chinese data this week showed July crude oil imports plunged 18.8% from the previous month to their lowest daily rate since January.

WTI's push past the previous April high means traders who were skeptical of efforts by OPEC+ have been proven wrong , said Fawad Razaqzada, market analyst at City Index and Forex.com.

"As more bearish speculators now step aside, oil prices should continue trending higher for as long as there are no major demand worries. So, a move up to $85 looks increasingly likely from here," according to Razaqzada.

More analysis on crude oil:

• Positive Momentum Is Accelerating For Oil
• USO: Crude Oil Spike Usually Appears At End Of Economic Cycle
• Exxon Mobil: Earnings May Be Down But Oil Price-Adjusted ROCE Is The Highest In 15 Years

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