Oil edges higher, holding to gains made on signs of tighter supply

By Thomson Reuters Feb 21, 2024 | 8:00 PM

By Colleen Howe

BEIJING (Reuters) – Oil prices rose slightly on Thursday, holding to gains from the previous session that came amid signs of tighter supply.

U.S. West Texas Intermediate crude futures (WTI) rose 17 cents to $78.08 a barrel for the prompt month. The May contract gained 14 cents to $77.45 a barrel by 0150 GMT.

Brent crude for April delivery ticked up 14 cents to $83.17 a barrel, while the May contract added 13 cents, rising to $82.24 a barrel.

“The premium of spot prices over near-date futures has been widening over recent weeks, indicating a robust demand outlook in the near term,” ANZ analysts wrote in a note.

Oil prices rose 1% on Wednesday, with oil contracts tied to near-term deliveries hitting their highest premium in months.

Refinery restarts in the United States are supporting demand, after a series of outages earlier cut U.S. refinery utilisation rates to the lowest level in two years.

BP’s 435,000 barrel-per-day (bpd) refinery in Indiana will return to full production in March, according to people familiar with plant operations, after a power outage from Feb. 1.

TotalEnergies’ 238,000 bpd refinery in Port Arthur, Texas, is also working to complete a restart, though it is still operating minimally following a weather-related power outage.

Analysts expect U.S. refinery run rates to have risen to 81.5% last week from 80.6% of total capacity in the previous week, according to a Reuters poll.

“Any drawdown in U.S. oil inventories should see further support for oil prices,” the ANZ analysts wrote.

Official data from the Energy Information Administration is due at 1600 GMT on Thursday, delayed a day by a U.S. holiday.

(Reporting by Colleen Howe; Editing by Tom Hogue)