WTI crude hits highest close 4 weeks as US inventories fall

Oil drilling rigs

Oil ended the session positive today, Jan. 24, after data that showed a more-than-expected decline in US oil inventories and as geopolitical tensions escalated in the Middle East.

Brent crude oil for March delivery rose 0.6%, or 49 cents, to $80.04 a barrel, after touching $80.73 during trading.

WTI crude for March delivery increased by 0.95%, or 72 cents, to $75.09 per barrel—marking the highest close Dec. 26, 2023.

Data from the US Energy Information Administration revealed that oil inventories decreased by 9.2 million during the week ended Jan. 19, while expectations were for a decrease of 1.2 million barrels.

HSBC Bank analysts expect that Brent crude will range between $75 and $85 per barrel without significant change in the medium term. The spare production capacity of OPEC countries and their allies can offset the effects of geopolitical risks, they noted.

Fitch said that redirecting ships away from the Red Sea will maintain the geopolitical premium in major commodity markets, including oil, gas, chemicals, and fertilizers. It confirmed the previous forecast for the price of Brent crude at $80 per barrel.