Oil rallies amid energy security concerns and falling stockpiles
BNN Bloomberg
Oil rose as mounting concerns over Europe’s energy security and declining U.S. inventories underscored risks to supplies.
West Texas Intermediate rose as much as 4.2 per cent to trade above US$81 a barrel. U.S. crude stockpiles fell last week for the first time in a month, according to government data, while fuel stockpiles along the East and West Coast slipped precariously. Meanwhile, leaks in three Nord Stream pipelines are widely suspected to be the result of sabotage, prompting fears of an escalation in energy conflict between Russia and Europe.
“The damage to Nord Stream is very concerning both from a supply issue and a political issue in that it assures supply from Russia is not reliable,” said Dennis Kissler, senior vice president at Bok Financial Securities. “It raises concerns that all energy prices are vulnerable to price spikes if we see an early start to a harsh winter.”
Adding to bullish sentiment, crude inventories fell 215,000 barrels last week, the U.S. Energy Information Administration reported. West Coast gasoline stockpiles fell to their lowest in 10 years, while New England’s distillate stocks, which include diesel and heating oil, fell to an all-time low for this time of year.
