US crude oil and gasoline inventories fell more than anticipated last week, government data showed, as American refineries boosted processing rates to meet rising summer demand. The Energy Information Administration reported a 2.5 million barrel decline in commercial crude stocks, against a forecast draw of 1.8 million barrels. Gasoline inventories also slipped by 1.1 million barrels, signalling robust consumption during the peak driving season.
The data sent Brent crude futures up 1.4% to $84.30 per barrel by midday London time, while West Texas Intermediate climbed to $80.90. The stronger oil price rippled through London markets, lifting the FTSE 100 by 0.3% to 8,215 points. Energy-heavy indices benefited as BP shares rose 1.6% and Shell added 1.2%, making them among the top blue-chip gainers.
The inventory declines reflect a deliberate strategy by US refiners, who have lifted utilisation rates to 93% of capacity — the highest level in four months. Analysts at S&P Global Commodity Insights noted that the combination of strong exports and steady domestic demand is tightening supply. 'Refiners are running hard to meet both export orders and domestic petrol needs, which is drawing down stocks faster than usual,' one analyst said.
For UK investors, the move upward in oil prices provides a near-term boost to pension and ISA portfolios that hold energy shares. The FTSE 100's heavy weighting in oil majors means the index often tracks crude price movements. However, higher petrol costs could eventually feed through to UK pump prices, adding pressure on household budgets already stretched by elevated inflation.
Market participants are now watching for the next OPEC+ meeting, scheduled for early August, where producers may adjust output targets. Any decision to increase supply could cap further price gains. For now, the inventory data suggests a tight market that may keep oil prices elevated through the remainder of the summer.