Oil surges above $94 a barrel for the first time in a year as stockpiles shrink

US oil prices topped $94 a barrel on Wednesday for the first time in over a year, threatening to push up prices at the pump and inflation across the economy.

The latest gains came after federal data showed crude inventories fell by more than expected last week. Stockpiles at the closely watched Cushing, Oklahoma, storage hub plunged to nine-year lows.

"There's not a lot of oil there and that's causing some nervousness," said Tom Kloza, global head of energy analysis at Oil Price Information Service.

US crude prices jumped as much as 4% to $94.04 a barrel on Wednesday - the highest intraday price since August 30, 2022 - before settling at $93.68 a barrel, up 3.6% on the day.

The surge in oil prices could threaten the ongoing drop in gas prices.

The national average for regular gas dropped to $3.83 a gallon on Wednesday, according to AAA. That's five cents below the 2023 high set earlier this month.

The rally comes after a number of Wall Street banks ramped up their oil price forecasts in light of the aggressive supply cuts imposed by Saudi Arabia and Russia.