2022.03.2319:21:00UTC+00Oil Futures Close Sharply Higher On Drop In Inventories

Crude oil futures settled at over 2-week high on Wednesday, lifted by data showing a drop in U.S. crude inventories and amid worries about supply disruptions due to the ongoing war in Ukraine.

Concerns about disruptions in crude exports from Kazakhstan's CPC terminal on Russia's Black Sea coast contributed significantly to the uptick in oil prices.

West Texas Intermediate Crude oil futures for May ended higher by $5.66 or about 5.2% at $114.93 a barrel.

Brent crude futures are up $6.22 or 5.39% at $121.72 a barrel a little while ago.

According to reports, crude oil exports from Kazakhstan's CPC terminal stopped fully on Wednesday after damage caused by a major storm and continued bad weather. The pipeline carries around 1.2 million barrels per day of the country's main crude grade, which is nearly 1.2% of global demand.

Meanwhile, U.S. President Joe Biden is very likely to announce more sanctions on Russia when he meets European leaders in Brussels tomorrow.

Data released by U.S. Energy Information Administration (EIA) this morning showed US crude stockpiles fell by 2.51 million barrels in the week ended March 18th, after seeing an increase of 4.35 million barrels in the previous week. The drop was more than 1.7 times the expected decline.

Gasoline inventories were down 2.95 million barrels last week, after having dropped by 3.62 million barrels a week earlier. Meanwhile, distillate stockpiles declined by 2.07 million barrels last week, after seeing an increase of 332,000 barrels in the prior week.

The American Petroleum Institute reported late Tuesday that U.S. crude stocks fell by 4.3 million barrels for the week ended March 18 as against analysts' expectations for an increase.