Crude oil storage tanks are seen in an aerial photograph of the Cushing Oil Hub in Cushing, Oklahoma, U.S., April 21, 2020. REUTERS/Drone Base

NEW YORK, Feb 9 (Reuters) – Oil prices rebounded on Wednesday after U.S. crude oil inventories fell nearly 5 million barrels and demand for fuel hit a record high, underscoring the continued tightness of the market.

Brent crude futures rose 77 cents, or 0.9%, to $91.55 a barrel. US Crude West Texas Intermediate (WTI) ended up 30 cents at $89.66 a barrel.

U.S. crude inventories fell 4.8 million barrels last week to 410.4 million barrels, their lowest since October 2018, while overall product supplied, a demand indicator, hit a record high. 21.9 million barrels per day over the past four weeks, according to government data.

The strong activity and the ramp-up of processing at American refineries bode well for a tight market in the months to come.

“The data was decidedly bullish – everything was bullish, with stocks at their lowest level in years,” said Price Futures Group analyst Phil Flynn.

The market was also buoyed by concerns over continued threats to supplies to the United Arab Emirates, which has been hit by attacks from Yemen’s Houthi group, and to Russia due to the presence of thousands of its troops near from the Ukrainian border.

The Biden administration has reacted to the high prices by saying again this week that it has spoken with large producers about increased production, as well as the possibility of additional strategic exits from large consumers, as it said. did at the end of last year.

That helped boost some of Wednesday’s trading, which saw later contracts outperform in the first month, Price Futures Group’s Flynn said.

WTI for December delivery, for example, gained 96 cents on the day, reducing the current lag in the market. Forwarding is a condition in which short-term contracts are more expensive than longer-term contracts, indicating a tight market.

Bullish energy data from the US offset the prospect of increased supply from Iran, which put downward pressure on the market this week as Washington resumed indirect talks with Iran. to revive the 2015 nuclear deal.

A deal could lift US sanctions on Iranian oil and rapidly increase market supply, although a number of vital issues need to be addressed. Read more

“It doesn’t look like the Iran deal will be signed tomorrow, but there are some positive developments there,” said Claudio Galimberti, senior vice president of analytics at Rystad Energy.

Additional reporting by Florence Tan in Singapore and Rowena Edwards in London; Editing by Marguerita Choy and Barbara Lewis

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