Oil prices ticked up at Thursday’s trading session, extending gains after a plunge in U.S. crude oil inventories boosted fuel demand amid hopes of a possible Brexit deal.
What you should know: At the time of writing this report, Brent oil futures were up by 0.83% to $51.62, increasing the odds of staying above $50/barrel before Christmas. Also, the West Texas Intermediate futures gained 0.73% to trade at $48.47.
Both oil major contracts gained more than 2% yesterday.
Recent data from the Energy Information Administration (EIA) revealed a plunge of 562,000 barrels in U.S. crude oil supply for the week to Dec. 18. Although the plunge in U.S crude oil inventories was much smaller than the 3.186-million-barrel plunge many leading energy experts had earlier envisaged as well as the previous week’s draw of 3.135 million barrels.
The Energy Information Administration data follows the American Petroleum Institute’s report of a 2.7-million-barrel gain in U.S. crude oil supply the day before.
Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics spoke on the latest macro coming from COVID-19 fronts calming the nerves of oil traders
“The oil market rallied along with broader markets supported by a flat-out bullish EIA inventory report.
“And thanks to medical experts warning against overreaction to the new virus strain, there is a greater understanding it will not trigger a new wave of severe lockdown blockades around the world as France showed the way by quickly re-opening trade and transport links with the UK, which provided a major sigh of relief to oil markets for a lockdown perspective,” Innes stated.
For historical context read: Saudi blast: Good news for Nigeria?
Also, macros coming from the United Kingdom and EU bloc revealed they were nearing a deal in sealing a Brexit agreement, moving away from the chaotic finale anticipated on January 1.