Oil prices surged to their highest level in over a year during Asian trading hours, after crude stocks at a key storage hub fell to their lowest since July last year.

Crude inventories in Cushing, Oklahoma fell to 22 million barrels in the fourth week of September — hovering close to the operational minimum, according to data from the U.S. Energy Information Administration (EIA). That’s a drop of 943,000 barrels compared to the prior week.

The U.S. West Texas Intermediate futures touched $95.03 per barrel during Asia trading hours, marking the highest since August 2022. It was last trading at $94.61 per barrel. Global benchmark Brent rose 1.05% to $97.56 a barrel.

“Today’s price action seems to be Cushing driven, as it reaches a 22 million bbl low, the lowest level since July 2022,” Bart Melek, managing director of TD Securities, told CNBC.

If the inventories continue to dip below those levels, it’s going to be “rough” getting crude out into the market, Melek said on CNBC’s “Street Signs Asia.”

He forecasts that oil prices will continue to remain at “high level” for the rest of the year, with an upside risk if global oil cartel OPEC+ continues to keep supplies tight

Source: Agencies