Oil prices rise as US crude inventories drop

24 December 2020 (Last Updated December 24th, 2020 11:35)

Oil prices grew in the wake of a drop in US crude inventories and over hopes of an imminent Brexit deal.

Oil prices rise as US crude inventories drop
Oil prices also gained support from reports that the UK and EU were on the verge of striking a trade deal. Credit: C Morrison from Pixabay

Oil prices grew in the wake of a drop in US crude inventories and over hopes of an imminent Brexit deal.

Brent crude futures grew 17 cents, or 0.3%, to touch at $51.37 a barrel by 0745 GMT, while U.S. West Texas Intermediate (WTI) crude grew 10 cents, or 0.2%, to reach at $48.22, reported Reuters.

Nissan Securities general manager of research Hiroyuki Kikukawa said: “Lower US inventories of crude and fuels, as well as signs of a potential Brexit deal which led to weaker US dollar, were good news.”

“But lingering worries over a new variant of the novel coronavirus capped gains,” he said.

According to the Energy Information Administration, crude inventories in the US dropped by 562,000 barrels in the week to 18 December to 499.5 million barrels.

Gasoline stocks dropped by 1.1 million barrels to 237.8 million barrels, and distillate stockpiles plunged by 2.3 million barrels to 148.9 million barrels.

Oil prices gained support from reports that the UK and EU were on the verge of striking a trade deal.

Furthermore, the oil market drew support from the news that at least four drug manufacturers expect their Covid-19 vaccines to be effective against the new fast-spreading strain of coronavirus affecting the UK.