Oil prices jump as U.S. crude and gasoline stockpiles drop more than forecast

Brent crude oil climbed to four-month highs Wednesday after U.S. government data showed a surprise draw in domestic crude stockpiles and a much larger than expected drop in gasoline inventories.

Oil prices also were supported after Ukraine drone attacks on multiple regions in Russia, including a strike on Rosneft’s (OTC:RNFTF) biggest oil refinery, the latest of several attacks on Russia’s oil processing facilities.

Front-month Nymex crude (CL1:COM) for April delivery ended +2.8% to $79.72/bbl, its second highest settlement value this year and snapping a four-session losing streak, while front-month May Brent crude (CO1:COM) closed +2.6% to $84.03/bbl, its highest since November 6.

ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI)

The U.S. Energy Information Administration reported a draw of 1.5M barrels in U.S. commercial crude inventories for the week ended March 8, the first weekly decline in seven weeks; analysts polled by The Wall Street Journal had forecast the report would show a build of 2.8M barrels, but data from the American Petroleum Institute had indicated a 5.5M-barrel decline.

Front-month gasoline (XB1:COM) rallied to its highest settlement since September 18, +2.9% to $2.66/gal, after the EIA said energy firms pulled a much larger than expected 5.7M barrels of gasoline from stockpiles last week.

The rise in gasoline prices boosted the gasoline- and 321- crack spreads, which measure refining profit margins, to their highest since August and September 2023, respectively, according to Reuters.

“Gasoline is driving us today,” Price Futures Group analyst Phil Flynn said. “There is growing concerns about growing tightness with a combination of seasonal maintenance and other outages.”