Why US oil jumped 6% this week, and what it could mean for Nigeria

US crude oil prices rose sharply this week. November West Texas Intermediate (WTI), the main US oil price, traded at $97.58 a barrel on Thursday night. That is up $5.92, or 6.46%, for the week. Brent, the international benchmark, traded near $106.

What pushed the price up?

The biggest push came on Wednesday's data from the US Energy Information Administration (EIA). It said US crude stocks fell by 8.6 million barrels in the week ended 9 October. Traders had expected a fall of only 288,000 barrels.

A fall in stocks means the US used or exported more oil than it added. Buyers read that as a sign of tighter supply, so they bid the price up.

The source adds a caution. Crude stocks, at 415.6 million barrels, are still 3% above the five-year average. In its words, that is not a supply squeeze. Stocks of distillates, which include diesel, were 12% below the five-year average.

What is happening near the Strait of Hormuz?

The Strait of Hormuz is a narrow sea route in the Gulf. The article calls it the market's biggest supply risk. A container ship and a dry bulk carrier sank near it on Wednesday after separate projectile strikes. Iran said it was stepping up attacks in response to the US blockade of its ports and tighter sanctions.

There is one calming detail. The article says energy infrastructure has not been attacked in the past several days, and there has been no new direct interruption to oil production. It says the risk "has stopped expanding for the moment".

Is more supply on the way?

Some. The International Energy Agency (IEA) agreed to speed up releases from emergency stocks, including more than 20 million barrels of diesel. Countries pledged more than 400 million barrels in March, and about 330 million have been released so far.

Traders had talked about a diesel release nearer 50 million barrels. The IEA delivered less. The US is also considering easing limits on sanctioned ships so that legal oil can move on them. The article says the more-supply argument has not been enough to take control of the market.

Why did WTI rise more than Brent?

The article says Brent held above $100 but could not add to its risk premium, which is the extra price traders pay for fear of disruption. The new buying went into WTI after the US stock report.

What does this mean for Nigeria?

The article does not mention Nigeria. What follows is RainingMoney's reading, not the source's.

Nigeria sells crude oil and earns dollars from it, so higher prices can raise export earnings. Nigeria also imports a good deal of refined fuel, which is priced off global markets. Higher crude and tight diesel stocks can therefore push up what importers pay. The source gives no figures for Nigerian output, revenue or pump prices, so we cannot say by how much.

What should readers watch next?

• Whether Brent stays above $100.
• Whether the IEA diesel release eases tight diesel stocks.
• Any new attack on oil production or energy facilities, which the article says has not happened in recent days.

A week of gains does not make a trend. The article itself says Friday's trading could still change the weekly picture.