Oil prices record new highs on leveraged US fuel demand along with tighter supply

International benchmarks for crude oil achieved new highs on 9 August 2023 after a sharp drawdown in US fuel stockpiles coupled with Saudi Arabia and Russia extending supply cuts amid ailing demand from China.

As per government data, US gasoline stocks dipped by 2.7 million barrels last week while distillate inventories went down by 1.7 million barrels, completely disregarding analysts’ expectations for both to be largely stable. The US fuel drawdown countered the lethargic demand state in China after oil imports fell 18.8% from the previous month clocking their lowest rates since January.

Also supporting prices were top exporters such as Saudi and Russia extending their production cuts to include September by 1 million barrels per day (bpd) and 300,000 bpd respectively.

Brent crude climbed $1.38 or 1.6% higher at $87.55/barrel, its highest since 27 January 2023.

US West Texas Intermediate conclude at $1.48 or 1.8% higher at $84.40/barrel, achieving its peak since November 2022.