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Oil rises towards $75 as U.S. demand and Fed outweigh virus concern
By Alex Lawler
A sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. Picture taken November 22, 2019. REUTERS/Angus Mordant/File Photo
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Crude and other risk assets such as equities also got a boost after the U.S. Federal Reserve gave an upbeat economic outlook, which lifted investor spirits even as the Fed flagged a long-awaited end to its monetary stimulus.
Brent crude oil was up 65 cents, or 0.9%, to $74.53 a barrel at 1215 GMT, while U.S. West Texas Intermediate (WTI) crude rose $1.01 or 1.4%, to $71.88.
Demand has been rising in 2021 after last year's collapse, and the U.S. Energy Information Administration (EIA) on Wednesday said product supplied by refineries, a proxy for demand, surged in the latest week to 23.2 million barrels per day (bpd).
"These figures suggest a healthy economic backdrop," said Tamas Varga of oil broker PVM.
"Although the Fed's announcement triggered a jump in both oil and equity prices, the withdrawal of economic support together with the Omicron crisis are the two major headwinds the oil market is currently facing," he added.
Lending further price support, the EIA also reported that U.S. crude stocks fell 4.6 million barrels, more than analysts had forecast.
Worries about the virus and the prospect of a supply surplus next year, as flagged by the International Energy Agency in its monthly report this week, limited gains.
Britain and South Africa reported record daily COVID-19 cases while many firms across the globe asked employees to work from home, which could limit demand going forward. read more
"We are sceptical despite the latest news that the good sentiment on the oil market will be carried over into the first quarter," said Barbara Lambrecht of Commerzbank. "After all, a substantial supply surplus is looming."
www.reuters.com
By Alex Lawler
A sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. Picture taken November 22, 2019. REUTERS/Angus Mordant/File Photo
Register now for FREE unlimited access to reuters.com
- Summary
- U.S. crude inventories drop more than expected, demand surges
- Upbeat U.S. Federal Reserve boosts risk appetite
- Britain, S. Africa post biggest rise in daily COVID-19 cases
Crude and other risk assets such as equities also got a boost after the U.S. Federal Reserve gave an upbeat economic outlook, which lifted investor spirits even as the Fed flagged a long-awaited end to its monetary stimulus.
Brent crude oil was up 65 cents, or 0.9%, to $74.53 a barrel at 1215 GMT, while U.S. West Texas Intermediate (WTI) crude rose $1.01 or 1.4%, to $71.88.
Demand has been rising in 2021 after last year's collapse, and the U.S. Energy Information Administration (EIA) on Wednesday said product supplied by refineries, a proxy for demand, surged in the latest week to 23.2 million barrels per day (bpd).
"These figures suggest a healthy economic backdrop," said Tamas Varga of oil broker PVM.
"Although the Fed's announcement triggered a jump in both oil and equity prices, the withdrawal of economic support together with the Omicron crisis are the two major headwinds the oil market is currently facing," he added.
Lending further price support, the EIA also reported that U.S. crude stocks fell 4.6 million barrels, more than analysts had forecast.
Worries about the virus and the prospect of a supply surplus next year, as flagged by the International Energy Agency in its monthly report this week, limited gains.
Britain and South Africa reported record daily COVID-19 cases while many firms across the globe asked employees to work from home, which could limit demand going forward. read more
"We are sceptical despite the latest news that the good sentiment on the oil market will be carried over into the first quarter," said Barbara Lambrecht of Commerzbank. "After all, a substantial supply surplus is looming."
Oil rises around 2% on strong U.S. demand, upbeat Fed outlook
Oil prices rose around 2% on Thursday, as record U.S. implied demand, falling crude stockpiles and an upbeat economic outlook from the Federal Reserve trumped fears of the Omicron coronavirus variant hurting global consumption.
