Oil prices extended their gains on Thursday, buoyed by a sharper-than-expected decline in U.S. crude oil inventories and concerns over supply disruptions due to U.S. sanctions targeting Russian energy trade.
By 3:05 pm AEDT (4:05 am GMT) Brent crude futures were up by $0.37 or 0.5%, to $82.40 per barrel, building on a 2.6% rise in the previous session, which marked the highest level since July 26. U.S. West Texas Intermediate (WTI) crude gained $0.39 or 0.5%, to $80.43 per barrel.
The U.S. Energy Information Administration (EIA) reported a seventh consecutive weekly drop in domestic crude stockpiles, the longest streak of declines since July 2021. This has amplified concerns over tightening global oil supplies.
Additional pressure stems from the U.S. imposing fresh sanctions on Russian oil producers and shipping entities. The International Energy Agency (IEA) highlighted in its latest oil market report that these measures could severely disrupt Russia's oil supply chain, prompting major Russian oil buyers to seek alternatives and increasing global shipping rates.
Tempering further price increases, Israel and Hamas reached a ceasefire agreement, including a swap of hostages and prisoners, which could ease geopolitical tensions in the region.
