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Crude oil futures closed higher on Thursday after the U.S. reported a smaller-than-expected weekly increase in domestic crude inventories, while U.S. natural gas fell a day after its biggest percentage gain since July 2022.
The Energy Information Administration U.S. commercial crude inventories said increased by 3.5 million barrels to 443 million barrels for the week ending February 16, rising despite solid crude exports, continued refinery maintenance and stable crude imports – although the total was less than expected by many market observers.
U.S. crude inventories have risen for four straight weeks as major refinery outages left utilization rates at their lowest level in two years; BP’s (BP) 435,000 bbl/d Whiting refinery in Indiana, the largest in the U.S. Midwest, remained idled after a power outage on Feb. 1, while TotalEnergies’ 238,000 bbl/d refinery (TTE) in Port Arthur, Texas, is still inactive. run at idle after a weather-related interruption.
Oil markets continue to battle between geopolitical and fundamental concerns, but “extensive refinery maintenance will extend from the US to Europe and then China in the coming months means that if it weren’t for geopolitical tensions, prices would be lower” , Kpler analyst Matt Smith said.
West Texas Intermediate (CL1:COM) crude for April delivery on the Nymex has been established +0.9% at $78.61/barrel, and April Brent crude (CO1:COM) closed +0.7% at $83.67 per barrel, while March Nymex natural gas (NG1:COM) finished -2.3% to $1.732/MMBtu after skyrocketing 12.5% on Wednesday.
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The premium for second-month WTI crude futures was as high as $0.75 a barrel, a spread that has widened in recent sessions, which “points to market contraction,” the analyst said. UBS Giovanni Staunovo, as market participants are likely pricing in a potential supply disruption in the near future from the Middle East or elsewhere.