Crude oil futures closed sharply more on Wednesday as a report by the Energy Information Administration showed a drop in U.S. inventories, and favorable geopolitical developments appear to have cleared up possible barriers to further demand for energy resources.
The EIA reported a drop of 562,000 barrels for the week ended on December 18, compared to an average drop of 4.7 million barrels forecast by analysts surveying S&P Global Platts.
A report by the U.S. Petroleum Institute with less attention late Tuesday showed U.S. crude oil inventories rose 2.7 million barrels a week, according to sources. It is not uncommon for API data and weekly environmental impact reports to be inconsistent, but investors are more inclined to the government’s environmental impact report.
EIA data also showed crude oil inventories at the Cushing warehouse, Okla., Which fell by 26,000 barrels for the week. Meanwhile, gasoline supplies fell by 1.125 million barrels, while distillate stocks fell by 2.325 million barrels. S&P Global Platts forecast a 1.4 million barrel increase in gasoline supply and a 1.1 million barrel reduction in distillates.
In geopolitics, a report by The Sun indicated that a Brexit deal was “looming” and could be reached as soon as Wednesday or Christmas Eve, helping boost greater hopes of avoiding a hard Brexit, where Britain emerges from EU trade a bloc without a trade pact. hands.
“The chances of a Brexit deal, as well as the possibility that the COVID relief bill will bring more money into the hands of consumers, affect us,” Phil Flynn, senior market analyst at Price Futures Group, told MarketWatch.
President Donald Trump on Tuesday criticized a congressional agreement on coronavirus aid that amounted to about $ 900 billion and called on lawmakers to increase direct payments to Americans to $ 2,000 from $ 600.
Oil is recovering from a weekly slippage caused by concerns that the rapid spread of the coronavirus variant would lead to increasingly strong global blockades, shaking energy demand.
However, investors have consoled themselves in signs of easing restrictions on travel originating in the UK, where reports of the COVID mutation have been linked to an increase in infections.
France has reopened its border with Britain after a ban aimed at preventing a new strain from entering Europe. Drivers will now be allowed to enter France by tunnel or ferry provided they provide a negative virus test.
“Continued transportation and people between the two countries are a positive development, but the Covid test requirement will prevent movement,” Rystad Energy oil market analyst Louise Dickson wrote in a daily note.
West Texas Crude Oil for February delivery CLG21,
closed $ 1.10, or 2.3%, at $ 48.12 a barrel, after falling 2% on Tuesday.
February oil brent BRNG21,
added $ 1.12, or 2.2%, to drop to $ 51.20 a barrel on ICE Futures Europe, after slipping 1.6% in the previous session.
WTI is down 2.5% during the week, while Brent is on track to fall 2.1%, FactSet data show, based on the most active contracts.
Perhaps by providing modest support for crude oil, Reuters reported a supply disruption in Nigeria, with Exxon Mobil Corp. XOM,
by issuing force majeure at the Qua Iboa crude oil export terminal, although that plant could start operating in early January.
Return to Nymex, January RBF21,
gasoline added 4.25 cents, or 3.2%, to $ 1.3820 a gallon, while January heating oil was HOF21,
picked up 3.59 cents, or 2.5%, to end at $ 1.44975 a gallon.
Natural gas for January delivery NGF21,
It traded at $ 2,608 per million British thermal units, down 17.20 cents or 6.2%, its biggest one-day drop since Dec. 7, according to Dow Jones Market Data.