Potential OPEC+ Supply Cut Drives Up Oil Prices in The U.S.

Oil prices increased on Thursday as concerns about a supply cut increased in the light of disruptions to Russian exports, the possibility of output cuts by major producers, and the partial shutdown of a U.S. refinery.

Brent crude rose 59 cents, or 0.6%, to $101.81 a barrel by 0400 GMT, while U.S. West Texas Intermediate crude was up 42 cents, or 0.4%, at $95.31 a barrel.

On Wednesday, crude oil benchmark contracts hit their highest levels in three weeks after the Saudi energy minister hinted that OPEC and its partners, OPEC+, would restrict production to boost prices.

“Brent crude oil prices rebounded above the $100/barrel mark following Saudi officials showing willingness to defend prices via an OPEC+ production cut if necessary,” said Citi analysts.

The United States is the largest consumer of oil in the world, and on Wednesday, BP reported that an electrical fire had forced the closure of some units at its refinery in Whiting, Indiana. The 430,000 bpd refinery is an important energy source for the Midwest and Chicago.

In addition, falling crude and product stockpiles in the United States contributed to the upward pressure on prices. Sharper than expected, oil stockpiles fell by 3.3 million barrels in the week ending August 19, bringing the total down to 421.7 million barrels.

In the last four weeks, the average amount of gasoline supplied each day was 7% less than the same time last year. This means that the overall demand for gasoline in the U.S. fell. 

Original source material for this article taken from here