FX.co ★ Oil Futures Settle Sharply Higher On Concerns About Supply Outlook

Crude oil prices moved higher on Thursday, continuing to benefit from Wednesday's data that showed declines in crude and gasoline inventories in the week ended August 12.

Prospects of a drop in oil supply from Russia during the later part of the year due to bans by the European Union on Russian oil exports contributed as well to the jump in crude prices.

West Texas Intermediate Crude oil futures for September ended higher by $2.39 or about 2.7% at $90.50 a barrel.

Brent crude futures were up $2.86 or about 3% at $96.51 a barrel a little while ago.

Data from U.S. Energy Information Administration (EIA) showed crude stockpiles in the U.S. dropped by 7.1 million barrels last week, nearly three times the expected drop.

The data showed gasoline inventories also fell 4.6 million barrels last week, helping offset growing worries about an economic slowdown.

Traders also noted a report about supply constraints after OPEC Secretary General Haitham Al Ghais said global oil markets remained at the risk of a supply squeeze.

Al Ghais said fears of an economic slowdown in China had been exaggerated, and added that the oil outlook for 2023 was "relatively optimistic" and that physical oil consumption remained strong despite the more than 30% drop in futures pricing of crude from March highs due to fears of a global recession.

Al Ghais also said that the influential producer group is not to blame for soaring inflation and it is underinvestment - chronic underinvestment that is behind the price rise.