Oil prices climbed about 2% to a two-week high on Wednesday on a bigger-than-expected US storage draw and as rising tensions in the Middle East threaten to disrupt oil supplies from the region, with Iran calling for an oil embargo on Israel.

Brent futures rose $1.46, or 1.6%, to $91.36 a barrel by 10:38 am EDT, while US West Texas Intermediate (WTI) crude rose $1.45, or 1.7%, to $88.11.

That put Brent on track for its highest close since September 29 and WTI on track for its highest close since October 3. Earlier in the session, both benchmarks rose more than $3 a barrel.

The US Energy Information Administration (EIA) said energy firms pulled 4.5 million barrels of crude from stockpiles during the week ended October 13.

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That was much higher than the 0.3-million-barrel draw analysts forecast in a Reuters’ poll and in line with the 4.4-million-barrel drop seen in data from the American Petroleum Institute (API).

It was also the fourth crude storage decline in five weeks and compares with a 1.7-million-barrel draw during the same week last year and a five-year (2018-2022) average build of 2.5 million barrels for this time of year.

The decline included a drop of 0.8 million barrels at the Cushing storage facility in Oklahoma to its lowest level since October 2014, prompting concerns about the quality of oil remaining in the tanks.

Published in The Express Tribune, October 19th, 2023.

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