By Barani Krishnan
Investing.com - Crude prices edged closer toward $90 per barrel on Wednesday as longs piled into a market hyped by talk of tight supply while awaiting inventory updates from the U.S. government, which has so far provided contrary demand data over the past two weeks.
The West Texas Intermediate benchmark for U.S. crude settled up $1.53, or 1.8%, at $86.96 per barrel for its highest close since October 2014. WTI is up almost 14% since the start of the year.
London-traded Brent, the global benchmark for oil, settled up 93 cents, or 1.1%, at $88.44 per barrel, after a seven-year high at $88.12. Like WTI, Brent is up more than 13% for 2022.
Wednesday’s rally, the fourth day in a row for oil, came ahead of weekly data from the U.S. Energy Information Administration on crude, gasoline and distillates inventories.
Ahead of the EIA report, due at 11:00 AM ET (16:00 GMT) on Thursday, the American Petroleum Institute will issue a snapshot at around 4:30 PM today of what last week’s stockpiles of crude and fuel products could have been.
According to industry analysts tracked by Investing.com, crude stockpiles fell by 1.904 million barrels last week on top of the 4.553 million-barrel reported by the EIA for the previous week to Jan. 7.
{{ecl-485||Gasoline stockpiles} likely fell by 850,000 barrels, versus the previous week’s rise of 2.537 million.
Wednesday’s gains in oil after reports of a fire on a pipeline from Iraq to Turkey briefly stopped flows, increasing concerns about an already tight short term supply outlook.
The International Energy Agency, meanwhile, said in a report that the oil market was likely to flip into surplus in the first quarter as some producers are set to pump at or above all-time highs.
An oil surplus should also lead to a build-up in inventories, as the IEA reported that commercial stocks in OECD countries were well below pre-pandemic levels at around seven-year lows.