Oil prices climb to nine-month high after inventory draw
Oil climbed to a nine-month high on Thursday after government data showed a fall in U.S. crude stockpiles last week, while progress towards a U.S. fiscal stimulus deal and strong Asian demand also buoyed prices.
The U.S. dollar also set a 2-1/2-year low against major rivals on Thursday. Oil prices generally rise when the dollar falls because crude priced in the greenback becomes cheaper for buyers holding other currencies.
Brent crude futures rose 72 cents, or 1.4%, to $51.80 a barrel at 0744 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose by 71 cents, or 1.5%, to $48.53 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.
“U.S. 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 U.S. will continue to deliver more monetary and fiscal stimulus, sending the dollar lower and most commodities higher.”
U.S. crude inventories fell by 3.1 million barrels in the week to Dec. 11, the Energy Information Administration said, more than analysts’ expectations of a 1.9-million-barrel drop.
Also boosting oil prices, U.S. lawmakers edged closer to agreement on a $900 billion virus-relief spending package on Wednesday with top Democrats and Republicans sounding more positive than they have in months about getting something done.
The United States on Thursday also expanded its campaign to deliver COVID-19 vaccine shots into the arms of doctors and nurses on the frontlines of a pandemic that has killed more than 2,500 Americans a day this week.
“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.
