Oil prices extended their gains on Thursday (March 14) after a surprising drop in U.S. crude reserves indicated increased demand, while potential supply disruptions from Ukrainian attacks on Russian refineries further supported oil prices.

At the close of trading on March 14, Brent crude futures rose by 10 cents (or 0.12%) to $84.13 per barrel. WTI crude futures increased by 7 cents (or 0.9%) to $79.79 per barrel.

Both contracts saw a 3% rise to their highest levels in four months on March 13, driven by strong demand prospects in the U.S. and escalating geopolitical risks.

Ukrainian drone attacks on Russian oil facilities continued on March 13, causing fires at Rosneft’s largest refinery. This was one of the most severe attacks on Russia's energy sector in recent months.

Following significant damage to Lukoil’s refinery in Nizhny Novgorod on March 12, Ukraine targeted refineries in the Rostov and Ryazan regions.

On the demand side, U.S. crude reserves unexpectedly fell due to increased refining activity and a reduction in gasoline stocks amid strong pre-summer demand, according to the International Energy Agency (IEA).

U.S. crude reserves ended a six-week streak of increases, dropping by 1.5 million barrels to 447 million barrels for the week ending March 8, contrasting sharply with analysts' forecast of a 1.3 million-barrel increase.

Gasoline reserves decreased for six consecutive weeks, falling by 5.7 million barrels to 234.1 million barrels, three times the forecasted decline of 1.9 million barrels.

Motor fuel reserves on the U.S. Gulf Coast dropped to their lowest level since November 2022, while finished motor gasoline supplies, an indicator of demand, rose by 30,000 barrels per day to over 9 million barrels per day for the first time this year.

Source: Vietstock