By Adedapo Adesanya
The crude oil market jumped more than $1 a barrel on Thursday, closing out the month higher on the prospect of the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) staying the course on production cuts and ongoing attacks on Russia’s energy infrastructure.
Brent crude futures settled at $87.48 a barrel after gaining $1.39 or 1.6 per cent, and the US West Texas Intermediate (WTI) crude futures settled at $83.17 a barrel after it chalked up $1.82 or 2.2 per cent.
Investors will watch for cues from a meeting next week of the Joint Monitoring Ministerial Committee of the producer group, OPEC.
OPEC is meeting again next week and expectations are that it will leave its production policy unchanged.
In the prior session, oil prices had come under pressure from last week’s unexpected rise in US crude oil and gasoline (petrol) inventories, driven by an increase in crude imports and sluggish gasoline demand, according to the US Energy Information Administration (EIA) data.
However, after some time to digest the data, which analysts said was a smaller increase than anticipated for this time of year, prices shifted into rally mode.
Also putting upward pressure on oil prices is the intensified Russia-Ukraine conflict, which has focused most recently on energy infrastructure despite warnings not to attack the structures.
A Ukrainian drone attack last week on a Russian refinery operated by state-run Rosneft has resulted in a production shutdown after damage to the refinery’s crude processing capacity.
Ukraine has stepped up attacks on oil refineries in Russia in recent weeks, which have reduced Russian refining capacity, and which, reportedly, have the White House concerned about rising international prices.
Ukrainian drone attacks on Russian refineries in recent weeks have taken out as much as 600,000 barrels in daily processing capacity in Russia.
US refinery utilisation rates, which rose 0.9 percentage points last week, also supported prices.
The oil and gas rig count, an early indicator of future output, also fell by three to 621 in the week to March 28, according to energy services firm Baker Hughes.
Support also came as the US economy grew in the fourth quarter as the country’s gross domestic product increased by 3.4 per cent, the Commerce Department’s Bureau of Economic Analysis said.
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