Oil prices up 2 percent amid declining inventories

May 25, 2023

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oil prices experienced a 2% increase following an unexpectedly large drawdown in U.S. crude inventories and a warning from the Saudi energy minister, which raised the possibility of additional production cuts by OPEC+.

Brent crude futures climbed by $1.52, or 2%, settling at $78.36 per barrel, while U.S. West Texas Intermediate crude (WTI) saw a gain of $1.43, or 2%, reaching $74.34.

The Energy Information Administration reported a significant and surprising weekly drawdown of 12.5 million barrels in U.S. crude inventories, bringing the total to 455.2 million barrels. This decline was attributed to a decrease in imports. Analysts had anticipated an increase of 800,000 barrels. Additionally, U.S. gasoline stocks decreased by 2.1 million barrels to 216.3 million barrels during the same week, as reported by the EIA. Furthermore, distillate stockpiles fell by 600,000 barrels to 105.7 million barrels.