Oil prices increase due to drop in US crude inventories

17 December 2020 (Last Updated December 17th, 2020 11:56)

Oil grew to a nine-month high following a drop in US crude inventories last week, and strong demand in Asia.

Oil prices increase due to drop in US crude inventories
The two benchmarks touched their highest since early March. Credit: Kristina Kasputienė from Pixabay.

Oil grew to a nine-month high following a drop in US crude inventories last week, and strong demand in Asia.

Prices were supported by the progress made towards a fiscal stimulus deal in the US.

Brent crude futures grew $0.72, or 1.4%, to $51.80 a barrel at 0744 GMT, while US West Texas Intermediate (WTI) crude futures increased by $0.71, or 1.5%, to reach $48.53 a barrel.

The two benchmarks touched their highest since early March.

OANDA senior market analyst Edward Moya was quoted by the news agency as saying: “All the headlines have been bullish for oil prices.”

Moya also added: “US stockpiles posted a larger-than-expected draw, three of India’s refiners are operating almost at 100% capacity, indicating crude demand remains strong, and it seems the US will continue to deliver more monetary and fiscal stimulus, sending the dollar lower and most commodities higher.”

Crude stocks in the US dropped by 3.1 million barrels in the week to 11 December, according to the Energy Information Administration (EIA).

Supporting the prices, US lawmakers edged closer to an agreement on a $900bn coronavirus-relief spending package on 16 December.