Oil climbed to a nine-month high on Thursday after government data showed a fall in US crude stockpiles last week, while progress towards a US fiscal stimulus deal and strong Asian demand also buoyed prices.
The US dollar set a 2.5-year low against major rivals on Thursday. Oil prices generally rise when the dollar falls because crude priced in the greenback becomes cheaper for buyers holding other currencies.
Brent crude futures were up $0.14 at $51.22 a barrel by 1110 GMT, having traded as high as $51.90.
US West Texas Intermediate (WTI) crude futures rose by $0.2 to $48.02 a barrel, having traded as high as $48.59. Both benchmarks hit their highest since early March.
“All the headlines have been bullish for oil prices,” said Edward Moya, senior market analyst at Oanda in New York.
“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.”
US crude inventories fell by 3.1 million barrels in the week to December 11, the Energy Information Administration said, far more than analysts’ expectations of a 1.9-million-barrel drop.
Also boosting oil prices, US lawmakers edged closer to agreement on a $900 billion virus relief spending package on Wednesday. The United States on Thursday also expanded its campaign to deliver Covid-19 vaccine shots.
“It seems to be a much better festive season than most bullish traders could expect for. But whether oil prices can remain as high and keep these gains is still questionable amid the demand destruction lockdowns are causing,” said Bjornar Tonhaugen at Rystad Energy.
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