Oil prices extend gains to six-month highs

Global oil prices rose in European trade on Wednesday on track for the fifth profit in a row, scaling a six-week high as Brent approaches $90 due to concerns about global supply disruptions.

The OPEC+ technical meeting wrapped up today without changes in production policies, with traders now awaiting official US inventory data from the EIA later today, after initial data showed a larger than expected drawdown.

Prices 

US crude rose 0.85% to $86.06 a barrel, the highest since October 2023, while Brent rose 0.8% to $89.84 a barrel, the highest since October 2023 as well. 

US crude rose 1.75% on Tuesday, while Brent added 1.8%, the fourth profit in a row amid growing geopolitical concerns. 

Global Supplies

Ukraine continued its drone attacks against Russian energy infrastructure, after hitting Russia’s third largest oil refinery this week.

Iran on the other hand vowed to respond to Israel after accusing it of launching airstrikes against its consulate in Damascus, killing seven Iranian officials. 

The increasing tensions between Israel and Iran have stoked concerns once more about a potential widespread conflict in the Middle East that could disrupt supplies.

US Stocks

Initial data from the American Petroleum Institute showed US crude stocks fell by 2.3 million barrels in the week ending March 29, passing estimates of 0.5 million drop. 

It’s the third weekly drop in a month, which is a positive sign for demand in the US.

Now traders await official EIA data today, expected to show an inventory drawdown of 0.3 million barrels. 

Oil Supply Deficit Projections 

Bank of America is projecting a global oil supply deficit of 450 thousand bpd in the second and third quarters as global GDP growth rebounds.