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Oil futures rise on news of decreases in inventories

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Crude oil futures ticked up during midmorning trade in Asia on December 30 as bullish data from the American Petroleum Institute (API) boosted market sentiment, even as new cases of the mutant coronavirus strain surfaced around the world, S&P Global Platts said in a report.

The ICE February Brent futures contract was up 19 cents/b (0.37%) from December 29, settling at $51.28/b while the NYMEX February light sweet crude contract was up 30 cents/b (0.62%) at $48.30/b. Both markers had risen 0.45% and 0.80% on Dec. 29.

The API data showed a 4.785-million-barrel draw in US crude inventories for the week ended December 25. This was larger than the 3.8-million-barrel draw predicted by analysts surveyed by S&P Global Platts.

“Oil prices have remained supported by a weaker US dollar overnight and have finally found a friend in the API inventory report. This morning the American Petroleum Institute (API) reported a much larger draw versus consensus in crude oil inventories for the week ending December 25,” said Stephen Innes, chief global market strategist at Axi, in a December 30 note.

The market gleaned further support from decreases in product inventories. US gasoline and distillate inventories fell 718,000 barrels and 1.887 million barrels, respectively, in the week ended December 25.

According to S&P Global Platts, these draws were especially bullish for the market as they were counter to analysts’ expectations of a 2.3-million-barrel build and a 1.3-million-barrel build in gasoline and distillate inventories, respectively.

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