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.
READ: World’s largest oil company to pay $75 billion annual dividend, despite plunge in profits
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.
READ: Brent crude surges 5.4%, global demand for energy climbs higher
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
READ: ExxonMobil issues force majeure on Qua Iboe Terminal
“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.
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