By Barani Krishnan

Investing.com – If you push hard enough you’ll get there, is the saying. 

Oil longs who achieved their $90-per-barrel goal Wednesday thanks to their pushing, but also due to the constant messaging from Wall Street banks which had been working toward this target for months.

oil hit $90.07 per barrel, a level unseen previously since 2014, as the London-traded global crude benchmark added another 14% to its price after last year’s gain of 50%.

US crude oil benchmark, the price of $88, was up by more than 16%, after an additional 50% gain in 2021.

“In markets, narratives are what matter at times, not necessarily hard data,” said John Kilduff, partner at New York energy hedge fund Again Capital. “The narrative in oil now is overwhelmingly skewed to the positive side, helped by geopolitical tensions and the impression of a severely undersupplied market — something that will only be proven months from now.”

The latest run higher in oil prices came amid intense speculation that Russia will invade Ukraine despite repeated Moscow’s denials of such intent. This week, American troops were placed on “high alert” for possible deployment to Eastern Europe while NATO dispatched additional ships and fighter jets to the region, in anticipation that the Russia-Ukraine conflict will worsen.

Russia is one of the OPEC+ members. They also pumped less in the last month. This reinforces the idea that there’s an oversupplied market.

The US gasoline stockpiles rose again for the fourth week, but they declined last week due to a decrease in crude oil processing and a weakening fuel demand.

Automobile fuel gasoline, also known as petrol outside the United States, is America’s most-consumed oil product. Gasoline stockpiles rose by 1.3 million barrels in the week ended January 21 versus market expectations for a build of 2.5 million barrels after the previous week’s growth of 5.9 million, EIA data showed.

The latest week showed a slight contraction. However, the total number of gasoline barrels has risen to nearly 25 million since December 31st. This is because Americans have been driving less in winter.

But crude prices have been rallying instead, creating a dichotomy with the oversupplied state of fuels in the United States, the world’s largest oil consumer. Wall Street banks also ignore this aspect, focusing instead on geopolitical tensions within Eastern Europe and OPEC+ tightness.

​​The EIA data release Wednesday showed crude stockpiles rising for a second week in a row as refiners processed less oil into gasoline. Crude inventories grew by 2.4 million barrels last week versus a 728,000-barrel decline forecast by the market, adding to the previous week’s gain of 515,000 barrels.

One positive inventory number for last week was, however, the distillates drawdown of 2.8 million, which exceeded market expectations for a decline of 1.3 million and added to the previous week’s draw of 1.4 million. Diesel for buses, trains, and trucks as well as jet fuel is made from distillates.

Oil longs’ next target for crude is $100 a barrel, also a level unseen since 2014.

“Before turning bearish on oil, we need to see a major technical reversal sign, ideally around that $90 handle,” said Fawad Razaqzada, analyst at London’s Think Markets. “So far, prices are continuing to make higher highs and higher lows.”

Sam Boughedda also reports on this matter.