Lower crude stockpile helps oil to nine-month high

Singapore — Oil hit a nine-month high on Thursday after government data showed a fall in US crude stockpiles last week, while progress towards a US fiscal stimulus deal and strong Asian demand also buoyed prices.

Brent crude futures rose 45 US cents, or 0.9%, to $51.53 a barrel at 4.36am GMT, while US West Texas Intermediate (WTI) crude futures rose by 46c, or nearly 1%, to $48.28 a barrel. Both benchmarks hit their highest since early March.

“All the headlines have been bullish for oil prices,” said Edward Moya, senior market analyst at Oanda in New York.

“US stockpiles posted a larger-than-expected draw, three of India’s refiners are operating almost at 100% capacity, indicating crude demand remains strong, and it seems the US will continue to deliver more monetary and fiscal stimulus, sending the dollar lower and most commodities higher.”

US crude inventories fell by 3.1-million barrels in the week to December 11, the Energy Information Administration said, more than analysts’ expectations of a 1.9-million-barrel drop.

Also boosting oil prices, US legislators edged closer to agreement on a $900bn virus-relief spending package on Wednesday, with top Democrats and Republicans sounding more positive than they have in months about getting something done.

The US on Thursday also expanded its campaign to deliver Covid-19 vaccine shots into the arms of doctors and nurses on the front lines of a pandemic that has killed more than 2,500 Americans a day.

“The last full trading week of the year has been very bullish for crude prices as energy traders focus more on the light at the end of the Covid tunnel and as Asian demand remains strong,” Moya added.

Reuters