The API reported late Tuesday a build in crude oil inventories of 1.141 million barrels for the week-ending December 4.
U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher on Wednesday, paring earlier losses, as positive news on COVID-19 vaccines lifted investor hopes for a recovery in fuel demand, outweighing concerns over an unexpected jump in U.S. oil inventories last week.
At 09:40 GMT, January WTI crude oil is trading $46.12, up $0.52 or +1.16% and February Brent crude oil is at $49.40, up $0.56 or 1.15%.
The U.K. began mass-vaccinating its population on Tuesday in a global drive that poses one of the biggest logistical challenges in peacetime history.
Pfizer cleared another hurdle on Tuesday when the U.S. Food and Drug Administration released documents that raised no new red flags over the safety or efficacy of the vaccine it developed with Germany’s BioNTech.
The vaccine news helped offset fears from a sharp rise in coronavirus cases globally that has led to a string of renewed lockdowns, including strict measures in California, Germany and South Korea.
The API reported late Tuesday a build in crude oil inventories of 1.141 million barrels for the week-ending December 4. Analysts had predicted an inventory draw of 1.514 million barrels for the week.
The API reported a large build in gasoline inventories of 6.442 million barrels of gasoline for the week-ending December 4 – compared to the previous week’s 3.402-million-barrel build. Analysts had expected a 2.933-million barrel build for the week.
Distillate inventories were up by 2.316 million barrels for the week, compared to last week’s 334,000-barrel increase, while Cushing inventories fell by 1.845 million barrels.
Oilprice.com is reporting that Iraqi’s Oil Minister sees oil breaking $50 in early 2021.
Oil prices are set to exceed $50 a barrel early next year, thanks to the OPEC+ production agreements, although prices are still volatile because of the pandemic, Iraqi Oil Minister Ihsan Abdul Jabbar Ismaael said over the weekend.
“Prices are improving, but they are still sensitive to fluctuations caused by the repercussions of coronavirus,” the oil minister of OPEC’s second-largest producer said at an oil and gas conference in Baghdad on Sunday, as carried by Middle East Monitor.
COVID-19 has crippled the oil industries, putting them in a “critical situation,” according to the Iraqi minister.
Hedge fund managers were substantial buyers of petroleum futures and options last week for a fourth week in a row, as sign of increasing confidence that coronavirus vaccines will drive a recovery in oil consumption next year.
Today’s Energy Information Administration’s (EIA) weekly inventories report, due to be released at 15:30 GMT, is expected to show a 0.90 million-barrel drawdown. A reported rise like the API report could pressure prices. However, it all depends on how strong speculators feel about the effectiveness of the vaccines.
Prior to the report, the EIA said on Tuesday that U.S. crude oil production is expected to slide next year by 240,000 barrels per day (bpd) to 11.10 million bpd, a smaller decline than its previous forecast for a slide of 290,000 bpd.
For a look at all of today’s economic events, check out our economic calendar.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.