Oil traded near the highest close in over three months after U.S. crude stockpiles declined more than expected, easing oversupply concerns.
Futures were little changed in New York after rising for a fourth week on Friday, the longest run since April. American crude supplies fell by 5.47 million barrels in the week ended Dec. 20, more than three times the median estimate in a Bloomberg survey. Elsewhere, Iraq resumed output at an oil field a day after protesters forced a halt in operations.
Oil is poised for the biggest yearly gain since 2016, after being boosted recently by a breakthrough in U.S.-China trade talks and a commitment by the Organization of Petroleum Exporting Countries and its allies to deepen output cuts. Hedge funds remain upbeat on prices, increasing bullish wagers on Brent oil to a seven-month high, despite comments from Russia that OPEC+ would discuss ending supply curbs next year.
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“Crude draws and positive market sentiment have been price supportive in recent weeks,” said UBS Group AG analyst Giovanni Staunovo. “On the one hand market participants are looking at rising tensions in Iraq and Libya, but on the other hand production has not been hit by those tensions.”
West Texas Intermediate for February delivery rose 17 cents to $61.89 a barrel on the New York Mercantile Exchange as of 10:32 a.m. in London. Prices are also set for the biggest monthly gain since January.
Brent crude for February settlement added 39 cents, or 0.6%, to $68.55 a barrel on London’s ICE Futures Europe exchange. The global benchmark crude traded at a $6.51 premium to WTI.
While concern over rising production from non-OPEC nations including the U.S. and Brazil lingers, some of those worries were countered by American crude inventories falling for a second week to the lowest level in two months. The drop came despite the first dip in exports since late November, according to Energy Information Administration data on Friday. Gasoline stockpiles, however, rose for a seventh week to the highest since mid-March.
–With assistance from James Thornhill.
©2019 Bloomberg L.P.
