NEW YORK — Oil prices rallied on Wednesday after U.S. crude inventories dropped by nearly 5 million barrels and fuel demand rose to an all-time high, underscoring the market’s ongoing tightness.

Brent crude futures settled up 77 cents, or 0.9%, to $91.55 a barrel. U.S. West Texas Intermediate crude (WTI) ended up 30 cents to $89.66 a barrel.

U.S. crude stocks fell by 4.8 million barrels last week to 410.4 million barrels, their lowest since October 2018, while overall product supplied, a proxy for demand, hit a record 21.9 million barrels per day over the past four weeks, government data showed.

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The heavy activity and ramp-up in U.S. refinery processing augur for a tight market for coming months.

“The data was decidedly bullish hands down – everything was bullish, with inventories at their lowest level in years,” said Phil Flynn, analyst at Price Futures Group.

The market has also been supported by concerns about ongoing threats to supply in United Arab Emirates, which has been hit by attacks from Yemen’s Houthi group, and over Russia due to the presence of thousands of its troops near Ukraine’s border.

The Biden administration responded to high prices by again stating this week that it has been talking with large producers about more output, as well as the possibility of additional strategic releases from large consumers, as it did late last year.

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That helped spur some of Wednesday’s trading, which saw later-dated contracts outperform the front-month, said Flynn at Price Futures Group.

WTI for December delivery, for instance, gained 96 cents on the day, reducing the current backwardation in the market. Backwardation is a condition where near-term contracts are priced higher than longer-dated ones, indicating a tight market.

The bullish U.S. energy data offset the prospect of increased supply from Iran, which has put some downward pressure on the market this week as Washington resumed indirect talks with Iran to revive the 2015 nuclear deal.

An agreement could lift U.S. sanctions on Iranian oil and quickly add supply to the market, although a number of vital issues need to be resolved

BP’s profits hit their highest in eight years in 2021, lifted by soaring gas and oil prices, as the company boosted share repurchases and accelerated plans to cut emissions with increased spending on low carbon energy

Spanish oil major Repsol SA is considering putting some of its Canadian assets for sale later this year as it looks to reap the benefits of higher oil and gas prices

Oil prices surged to fresh seven-year highs, headed for a seventh straight weekly increase, built on ongoing worries about supply disruptions fueled by frigid U.S. weather and ongoing political turmoil among major world producers

Exxon Mobil Corp reported a fourth-quarter profit of $8.87 billion, its largest in seven years, as the top U.S. oil producer benefited from strong energy prices

OPEC+ missed its oil production target by more 800,000 barrels per day (bpd) on average last year, missing out on billions of dollars in revenues and hurting members of the group which have struggled to raise cash to invest

The first of the major oil companies to report quarterly results posted adjusted earnings of US$5.1 billion or US$2.65 a share on profits from pumping oil that soared about five times the pandemic-depressed results of a year ago

OPEC+ compliance with oil production cuts rose to about 122% in December, indicating that some members continue to struggle to raise their output

Oil prices fell about 3%, hit by investor concerns over the possibility of quicker than expected interest-rate hikes by the U.S. Federal Reserve that took down risk markets like equities while the dollar rallied

Brazil’s oil production reached 2.84 million barrels per day (bpd) in December 2021, up from 2.73 million bpd in the same period of the previous year, local oil regulator ANP said