Oil prices jump on unexpected drawdown in supplies

Yahoo Finance's Ines Ferre joins the Live Show to discuss the rise in oil prices amid retailers stocking up on supplies before the Memorial Day holiday.

Video transcript

SEANA SMITH: Watching the price of oil jumping on the heels of the latest inventory data. Ines Ferre is here with the details. Hey, Ines.

INES FERRE: Hey, Seana, that's right. A big drawdown when it came to inventories last week, and that's part of the reason why we saw oil spike today. You saw crude inventories that came down by more than 12 million barrels. That was a big surprise, because analysts had been expecting it to go up by about 800,000 barrels.

Also, gasoline was down by 2.1 million barrels. Now, the Memorial Day is really the kickoff. The Memorial Day next week is really the kickoff for the driving season for the summertime. So the thought being, perhaps, that retailers were stocking up on gasoline ahead of the Memorial Day weekend.

Also, some commentary from Saudi Arabia's energy minister basically warning short sellers watch out, saying, watch out, there could be pain ahead. Now, he said commentary before like this similar to this in the past. But the speculation is could there be further output cuts in the future when it comes to OPEC+? Oil today reaching a three-week high before coming down just a little bit but nevertheless settling up about 1% below $74 per barrel for WTI.

Brent Crude up more than 1% when it comes to the price of Brent. I just want to point out a year to date chart just briefly. Remember that output cut that we saw in April, at the beginning of April? That's when you saw oil spike there. It has since come down here.

So it's basically at the levels before that output cut was announced back by OPEC+. Same situation when it comes to WTI. But nonetheless, the impasse in Washington when it comes to the debt ceiling, that has also been putting a lid on oil prices recently, guys.

SEANA SMITH: Yes, certainly. The conversation has changed, because once we did get that oil cut, there was lots of talk about it heading $90, maybe even $100, a barrel. Here we are today $73 a barrel. Ines, great stuff. Thanks.