Oil extends gains, Brent surges over 5%

Oil drilling rigs

Oil extended gains today, Oct. 23, after the United States imposed sanctions on Russia's two largest oil companies, coinciding with data showing a surprise drop in US oil inventories last week.

Brent crude was trading up 5% at $65.76 a barrel, at 12:24 pm Makkah time. West Texas Intermediate (WTI) surged 5.15% to $61.53 a barrel.

The US imposed sanctions on Rosneft and Lukoil, following a similar move by the UK last week. Indian state-run refineries announced they were reviewing their purchases of Russian oil barrels to ensure no direct supplies from the two companies.

This comes after data from the Energy Information Administration on Oct. 22 showed that US commercial crude oil inventories fell by one million barrels during the week ended Oct. 17, contrary to expectations of a 2.2 million barrel increase.