DTN Oil Update
WTI Up 5% on Russia Sanctions; US Crude Stock Draw
SECAUCUS, N.J. (DTN) -- Crude futures rose 5% on Thursday, Oct. 23, placing WTI and Brent back above key bullish markers. Fresh U.S. sanctions on Russia's oil trade and a weekly draw of fuel inventories last week fueled today's rally.
The NYMEX WTI futures contract for December delivery settled up $3.29, or 5.6%, at $61.79 bbl -- back above the key bullish mark of $60 bbl, after five-month lows beneath $56 bbl this week. The session peak of $62.20 bbl also marked a two-high for WTI.
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The ICE Brent crude futures contract for December delivery rose $3.38, or 5.4%, to $65.97 bbl. Brent fell to $60.07 bbl on Monday, Oct. 20, before rebounding above the key $60 bbl mark in the latest session, with a two-week high of $66.12 bbl.
November RBOB gasoline futures climbed $0.0636 to $1.9286 gallon, while the front-month ULSD futures contract rose $0.1397 to $2.3983 gallon.
The U.S. Dollar Index advanced by 0.52 points to 98.725 against a basket of foreign currencies.
The recovery in oil prices is also driven by U.S. Energy Information Administration data showing across-the-board drop in oil inventories for the week ended Oct. 17.
Crude oil inventories fell last week for the first time in four weeks, decreasing by 1 million bbl to 422.8 million bbl, EIA data showed. Gasoline stocks fell by 2.1 million bbl to 216.7 million bbl. Distillate fuel oil inventories slid by 1.4 million bbl to 115.6 million bbl, adding to the prior week's 4.6 million bbl draw.
The U.S. Department of the Treasury added to the oil rally by announcing on Wednesday, Oct. 22, sanctions on Russian energy companies Rosneft and Lukoil, blocking all their associated property and interests in the U.S. The Trump administration and the European Union have sanctioned Russian oil trade to pressure Moscow to end the war in Ukraine.
Rosneft was sanctioned previously in 2020 -- during the first term of the Trump's administration -- for operating in sanctioned Venezuela's oil sector.
Stricter sanctions on Russian, Venezuelan and Iranian oil trade are expected to ease concerns about a worldwide oil glut. Earlier this month, the International Energy Agency predicted a potential record oversupply of 4 million bbl in 2026.