EIA refined oil inventories plummeted, and U.S. oil rose more than 1% to hit a seven-year high

November U.
S.
crude futures, expiring on Wednesday (Oct.
20), rose $0.
91, or 1.
3%, to settle at $83.
87 a barrel, while the more actively traded December contract rose $0.
98 to settle at $83.
42 a barrel
.
Brent oil rose $0.
74, or 0.
9 percent, to close at $85.
82, its highest level
since October 2018.
Crude inventories unexpectedly fell in the week ended Oct.
15, with inventories at the largest U.
S.
crude oil storage hitting their lowest level in three years
, according to the EIA inventory report released earlier.

The EIA report showed that the national refinery operating rate decreased for the second consecutive week to 84.
7%
due to refinery maintenance.
Gasoline demand was quite strong this week, causing inventories to unexpectedly fall to their lowest level
since November 2019.
Despite an increase in refining production and a decrease in exports last week, gasoline inventories are still declining
.
U.
S.
EIA refined oil inventories fell last week by the largest since the week of March 5, 2021, with Midwest crude inventories falling to their lowest level
since September 2018.
The four-week rolling average of demand is now at its highest level for the same period since 2007
.

Globally, refiners continue to increase production due to improved margins, and only downtime can limit the pace
of production.
U.
S.
refinery capacity utilization fell in the latest week, but analysts noted that supply could continue to be tight
if U.
S.
refiners ramp up production again.
Phil Flynn, senior energy analyst at Price Futures Grou, said increased demand, and inventories still falling amid low refinery capacity utilization during the maintenance period, could help but raise concerns about what would happen
when refiners had to ramp up production to meet very strong demand for gasoline and distillates.

Rob Thummel, portfolio manager at Tortoise, which manages about $8 billion in energy-related assets, said it was a sign of continued economic recovery and reflected the importance of crude oil-related products and their role in the current economic recovery, and concerns about demand were really not obvious
.

Oil prices rose at a time when shortages of coal and natural gas were straining energy supplies, while the economic recovery also brought a rebound
in oil demand.
Wall Street has been steadily raising its oil price forecasts
in recent weeks.
BNP Paribas is the latest to raise its forecast by $8 to $80.
50 a barrel
.

Sultan al-Jaber, UAE State Minister and chief executive of Abu Dhabi National Oil Corp.
, said at a conference on Wednesday that the current energy crisis was a wake-up call to invest more in the sector to avoid another energy supply shortage
.
The UAE is investing in boosting oil and gas production
.
Both Jaber and Saudi Energy Minister Prince Abdulaziz said that while we transition to cleaner energy, the world will still need fossil fuels
.

Speaking at the CERAWeek India Energy Forum, Indian Oil Minister HarDeep Singh Puri said high energy prices are affecting the global economic recovery, exacerbating inflation and logistics costs
.
If prices are not brought under control, the global economic recovery could be fragile
.
Oil prices must be predictable, reliable and stable, adding that high oil prices could also have an impact
on oil-producing countries in the long run.