Oil futures rose on Wednesday morning, finding support after industry data reportedly showed another big drop in U.S. crude inventories, as investors looked for signs of easing COVID restrictions from the China and were expecting a meeting this weekend of OPEC+ ministers.
price action
-
West Texas Intermediate crude for January delivery CL.1,
+2.10% CL00,
+2.10% CLF23,
+2.10%
rose $1.77, or 2.3%, to $79.97 a barrel on the New York Mercantile Exchange. -
January Brent crude BRNF23,
+1.99% ,
the global benchmark, rose $2.11, or 2.5%, to $85.14 a barrel on ICE Futures Europe. February Brent BRN00,
+2.02% BRNG23,
+2.02% ,
the most actively traded contract, gained 2.1% to $86.04 a barrel. -
Back to Nymex, December petrol RBZ22,
+1.02%
rose 1% to $2.356 a gallon, while December HOZ22 heating oil,
+3.13%
rose 3.1% to $3.399 per gallon.
Market factors
The American Petroleum Institute said Tuesday evening that US crude inventories fell by 7.9 million barrels last week, according to reports, while gasoline inventories rose by 2.9 million barrels.
Official data from the Energy Information Administration is expected Wednesday morning. Analysts polled by S&P Global Commodity Insight on average had expected crude inventories to fall by 4.4 million barrels. Gasoline inventories rose 600,000 barrels, while distillate inventories are expected to show an increase of 800,000 barrels.
Oil was finding support after the surprisingly bullish API reading on Crude, even after the Department of Energy released 1.4 million barrels from the Strategic Petroleum Reserve in the week ending May 25. November, leaving the US government with a cushion of just 389.1 barrels, Stephen Innes said. , managing partner at SPI Asset Management, in a note.
Crude also found support on expectations that China will take to start easing COVID restrictions after a wave of rare protests. Restrictions imposed by China have weighed on demand for crude from one of the world’s largest energy producers.
Traders are also focused on a Dec. 4 meeting of the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+.
“Oil is still profiting from speculation that OPEC will try to fool traders again, getting the largest bounce per barrel by announcing a surprise production cut. And with the focus on a reduction in COVID- zero from China, I don’t think anyone wants to be too short,” Innes wrote.
