Bigger-than-expected draw in US stocks supports oil

Tokyo — Oil futures rose on Wednesday after an industry report showed that US crude inventories fell by more than expected as prices enjoyed supported from news of successful trials of a vaccine for coronavirus.

Brent crude was up 31c, or 0.7%, at $43.92 a barrel by 2.13am GMT, while US oil gained 36c, or 0.9%, to $41.72 a barrel.

Crude stockpiles fell by 5.1-million barrels last week to about 482-million barrels, industry group data showed on Tuesday, compared with analysts’ expectations in a Reuters poll for a reduction of 913,000 barrels.

“Defying analysts’ expectations again, the American Petroleum Institute (API) reported on Tuesday a significant ‘draw’ in crude oil inventories,” said Stephen Innes, chief market strategist at Axi.

Petrol inventories dropped by 3.3-million barrels, the API data showed, against expectations for a draw of 263,000 barrels in a Reuters poll.

Distillate fuel stocks, which include diesel and heating oil, were down by 5.6-million barrels versus the expectation for a draw of 1.9-million barrels.

Oil prices also “continue to revel on the back of Pfizer’s vaccine announcement”, Innes said.

Brent gained nearly 3% on Tuesday, with US oil rising by a similar amount after initial trials data showed the experimental Covid-19 vaccine being developed by Pfizer and Germany’s BioNTech was 90% effective.

Both Brent and US oil prices are up more than 10% this week.