Singapore: Oil held gains near the highest level in more than three months on indications of shrinking US crude stockpiles and optimism in the global economic outlook.
Futures rose as much as 0.5 per cent in New York, set for the biggest monthly increase since January. American crude stockpiles fell by 1.5 million barrels last week, according to a Bloomberg survey before government data on Friday. Jobless claims in the US fell to a three-week low, reflecting a solid labour market in the world’s largest economy.
Oil is up about 12 per cent this month after the US and China made a breakthrough in their prolonged trade dispute and as the Organisation of Petroleum Exporting Countries and its allies agreed to deepen output cuts. The American Petroleum Institute reported Tuesday that crude stockpiles dropped by 7.9 million barrels last week, according to Reuters. It would be the largest draw since August if confirmed by official data.
“We have some good economic data coming out of the US and there’s some buying euphoria,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. “Crude has been on a steady upward trend from October when the US and China first discussed a trade deal, and in the absence of any risk on the horizon, markets are trading on the back of this optimism.”
West Texas Intermediate for February delivery rose 8 cents to $61.76 a barrel on the New York Mercantile Exchange as of 8:35am local time. Prices are heading for a fourth weekly advance, the longest run of gains since April.
Brent for February settlement climbed 5 cents to $67.97 a barrel on the ICE Futures Europe exchange. Prices are up about 9 per cent this month. The global benchmark crude traded at a $6.22 premium to WTI.
The Energy Information Administration is forecast to report a second weekly decline in crude stockpiles, according to a Bloomberg survey of analysts. American inventories are shrinking even as the nation pumps oil at near-record levels and shale explorers boost drilling. Separately, US jobless claims dropped to 222,000 in the week ended Dec. 21 from 235,000 previously, according to Labor Department figures released Thursday.