Oil Advances as Investors Track Crisis in Ukraine, Inventories

West Texas Intermediate rose above $93 a barrel. U.S. officials said they haven’t verified the claim that Russia is pulling back some troops and cautioned that an attack remains possible. Moscow has repeatedly denied it plans to invade its neighbor.

The American Petroleum Institute, meanwhile, said crude holdings at the storage hub in Cushing, Oklahoma fell 2.4 million barrels last week, according to people familiar with the figures. It’s the latest sign of dwindling inventories at key locations. Oil product stocks at a key Middle Eastern hub also plummeted last week.

The steady erosion of supplies has pushed gauges of market strength to their strongest levels in years, indicating near-term bullishness.

Crude is trading near the highest level since 2014 as investors bet global demand is running ahead of supply, draining inventories and forcing traders to pay steep premiums to get their hands on prompt barrels. The rally has lifted product prices, including for gasoline. That’s fanning inflation and posing a thorny challenge for leaders including Biden, as well as central bankers.

“Market participants are still willing to pay a sizable premium for oil that is deliverable at short notice,” said Carsten Fritsch, an analyst at Commerzbank AG.

The API also reported a draw in nationwide crude stockpiles, as well as slightly lower holdings of gasoline and distillates. If the group’s estimate for changes at Cushing proves to be accurate, inventories at the key hub would shrink to the least since 2018. Official U.S. government data is due later.