Oil jumps to highest since Feb. after larger-than-expected inventory draw, U.S. election in focus
Oil prices extended gains on Wednesday, rising to their highest since late February, after Saudi Arabia announced a big voluntary production cut, and as U.S. crude inventories declined in the latest week.
Brent crude gained 32 cents to trade at $53.92 per barrel, meanwhile U.S. West Texas Intermediate crude futures settled 70 cents, or 1.4%, higher at $50.63 per barrel.
Both contracts were up about 5% on Tuesday.
U.S. crude stocks fell sharply while fuel inventories rose, the Energy Information Administration said on Wednesday, and 2020 came to a close with a sharp decline in overall demand due to the coronavirus pandemic.
Crude inventories fell by 8 million barrels in the week to Jan. 1 to 485.5 million barrels, exceeding analysts’ expectations in a Reuters poll for a 2.1 million-barrel drop. The drop in crude stocks is typical for the end of the year, when energy companies take barrels out of storage to avoid hefty tax bills.
U.S. crude stockpiles tumble last week; 2020 fuel demand slumps – EIA
U.S. crude oil stockpiles fell sharply last week while fuel inventories rose, the Energy Information Administration said on Wednesday, and 2020 came to a close with a sharp decline in overall demand due to the coronavirus pandemic.
Crude inventories fell by 8 million barrels in the week to Jan. 1 to 485.5 million barrels, their biggest decline since August, exceeding analysts’ expectations in a Reuters poll for a 2.1 million-barrel drop. The drawdown in stocks is typical for the end of the year, when energy companies take barrels out of storage to avoid hefty tax bills.
Overall, in 2020 the United States experienced a heavy decline in crude production and demand due to the coronavirus pandemic. In the year, output fell to 11 million barrels per day from 12.9 million bpd, EIA said.
Reference: CNBC
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