Crude oil and gasoline prices surged to one-week highs, with WTI up +2.04% and RBOB up +1.99%. India’s potential trade deal with the US to decrease Russian crude imports boosted oil demand from alternative suppliers. Weekly EIA crude inventories unexpectedly declined, contributing to the price jump.

The Trump administration’s plan to refill the Strategic Petroleum Reserve by 1 million bbl in December and January provided further support to crude prices. However, concerns about a global supply glut persist, with the IEA forecasting a record global oil surplus of 4.0 million bpd for 2026.

Cooling tensions in the Middle East, following a ceasefire agreement between Israel and Hamas, have reduced the risk premium on crude prices. Additionally, a decrease in crude oil held on tankers globally, as reported by Vortexa, is bullish for oil prices.

OPEC+ agreed to a modest increase in crude production starting in November, less than market expectations, while OPEC’s September production rose to 29.05 million bpd, the highest in 2.5 years. Reduced crude exports from Russia due to Ukrainian attacks on refineries are also supporting oil prices.

Iraq’s agreement to resume oil exports from the Kurdish region could add 500,000 bpd to global oil supplies, potentially impacting crude prices. Concerns about the war in Ukraine leading to sanctions on Russian energy exports could further reduce global oil supplies.

The weekly EIA report showed a surprise decline in crude inventories by -961,000 bbl, with gasoline supplies falling by -2.1 million bbl. Distillate inventories saw a smaller draw than expected. US crude oil production slightly decreased to 13.629 million bpd.

Baker Hughes reported that the number of active US oil rigs remained unchanged at 418, slightly above a 4-year low. The decline in US oil rigs from a 5.5-year high in 2022 suggests a shifting trend in oil production.

Read more at Yahoo Finance: Crude Oil Rallies on Possible US-India Trade Deal and Unexpected Draw in EIA Inventories