Crude oil futures rose Thursday amid signs of a tightening global market and as the geopolitical outlook in the Middle East remains uncertain.
The West Texas Intermediate contract for April gained 67 cents, or 0.86%, to $78.58 U.S. a barrel Thursday The Brent contract for April added 55 cents, or 0.66%, to $83.58 a barrel.
A premium for immediate versus later delivery is typically a sign that the crude oil market is tightening, Staunovo wrote in a note to clients Thursday.
The market may be tightening due to winter storms in North America last month that knocked out 1.4 million barrels per day of global crude production, some experts opined The weather related disruptions happened at the same time India’s oil demand rose 8.2% year over year in January.
Meanwhile, compliance with OPEC+ production cuts has increased with exports down about 900,000 barrels in February, the lowest level since August.
In the U.S., commercial crude stockpiles rose by 3.5 million barrels last week while total inventory including finished products were largely flat, according to the Energy Information Administration. U.S. stockpiles have increased in recent weeks as the refinery utilization rate has dropped.
