Wednesday saw a 3% increase in oil prices to a four-month high due to unexpected withdrawals from US crude inventories, a greater-than-expected decline in US gasoline stocks, and possible supply interruptions after Ukrainian assaults on Russian refineries.
West Texas Intermediate (WTI) oil had a 2.8% increase of $2.16 to end at $79.72, while Brent futures saw a 2.6% increase to settle at $84.03 per barrel.
Brent's closing was at its highest point since November 6.
According to the US Energy Information Administration (EIA), during the week that concluded on March 8, energy companies unexpectedly removed 1.5 million barrels of crude oil from stockpiles.
This contrasts with the 1.3 million barrel build analysts predicted in a survey and the 5.5 million barrel outflow indicated by industry organization American Petroleum Institute (API) statistics.
In the meantime, US gasoline futures saw the largest price increase throughout the energy complex, increasing 2.9% to their highest level since September 2023, as a result of the EIA's report that energy companies removed a significantly larger-than-expected 5.7 million barrels of gasoline from stocks last week.
That contrasts with the 1.9 million barrels that analysts predicted would be removed from gasoline supplies in a poll.
Phil Flynn, an analyst of Price Futures Group, said that there are rising worries regarding tightness due to a combination of seasonal maintenance and extra outages.
The rise in gasoline prices caused the gasoline- and 321-crack spreads, which gauge refining profit margins, to reach their highest since August and September last year, respectively.
In Russia, Ukraine attacked its oil refineries during a second day of intense drone strikes, setting out a fire at Rosneft's largest refinery, which Russian President Vladimir Putin claimed was an attempt to sabotage his nation's presidential election this week.
According to Andrew Lipow, head of Houston-based Lipow Oil Associates, Russia may export less diesel fuel and may even start importing gasoline as a result of the damage Ukrainian drone strikes are causing to its refining capacity. That will undoubtedly affect prices globally.
Putin informed the West that the United States sending soldiers to Ukraine would be a major escalation of the conflict and that Russia was prepared for nuclear war. Putin did, however, add that he did not believe using nuclear weapons was necessary.
The belief that the most recent statistics on US inflation won't stop interest rate reductions by the middle of the year also provided support for oil and the broader financial markets.
Lower rates can sustain oil consumption and accelerate economic growth.
Contrary to many other estimates, OPEC maintained its prediction that oil demand would increase by 2.25 million barrels per day in 2024.