Oil rallies on bullish inventory data
Crude oil prices surged on Thursday, with WTI climbing over 4% to $58.70 per barrel after government data revealed a surprise draw in US crude stockpiles. Brent crude rose to $62.85 per barrel, its highest level since late December.
The rally followed the release of data showing US crude inventories fell by 3.8 million barrels last week, defying analyst expectations for a build. The unexpected decline provided welcome relief for a market that has been grappling with concerns about oversupply heading into 2026.
Third consecutive weekly gain
Oil is now on track for its third straight weekly advance, a notable turnaround after both benchmarks suffered their worst annual performance since 2020 last year. WTI and Brent each fell nearly 20% in 2025 amid persistent fears of excess supply.
For the week, WTI has traded in a range between $55.90 and $59.60 per barrel, while Brent has fluctuated between $59.80 and $63.65. The benchmarks touched their weekly lows on Tuesday before staging a sharp recovery.
Venezuela sanctions add uncertainty
Geopolitical factors are also supporting prices. Uncertainty around Venezuelan crude flows has resurfaced after Washington outlined plans to exert greater control over oil sales from the country. The US has intensified sanctions enforcement by seizing Venezuela-linked tankers.
The moves come after President Trump announced that Venezuela would transfer up to 50 million barrels of oil to the United States following recent political developments in the country.
Oversupply concerns persist
Despite the recent gains, analysts remain cautious about the longer-term outlook. The International Energy Agency expects global supply to exceed demand by 3.85 million barrels per day in 2026, equivalent to nearly 4% of global consumption.
Wall Street forecasts reflect this bearish view. Goldman Sachs sees Brent averaging $56 and WTI at $52 this year, while JPMorgan projects Brent at $58 and WTI at $54.
Natural gas prices, meanwhile, moved lower on Thursday. Henry Hub natural gas fell 0.28% to $2.89 per MMBtu as milder weather forecasts tempered heating demand expectations.