London — Oil gained ground on Wednesday on the back of a weaker dollar, a decline in US crude oil inventories and as Britain approved another coronavirus vaccine, but both benchmark contracts were set to end 2020 about 20% lower.

Brent crude futures rose 45c to $51.54 a barrel by 10.01am GMT, having started the year above $66. US West Texas Intermediate (WTI) crude added 39c to trade at $48.39, down from around $62 at the beginning of 2020.

Continued concern about coronavirus-related restrictions weighing on fuel demand were countered by some bullish factors. The dollar hit its lowest against a basket of currencies since 2018, making oil cheaper for holders of other currencies.

Raising hopes of a faster normalisation of travel and work, on Wednesday, Britain became the first country to approve a coronavirus vaccine developed by Oxford University and AstraZeneca.

Asian shares hit a record high with investors betting on a strong economic recovery in 2021, with little sign of policymakers winding back huge stimulus efforts and the US on the brink of agreeing a new package.

US crude oil stockpiles fell 4.8-million barrels last week to about 492.9-million barrels, exceeding analysts’ expectations in a Reuters poll for a draw of 2.6-million barrels, data from the American Petroleum Institute (API) showed.

On the supply front, a January 4 meeting of oil cartel Opec and allies, including Russia (Opec+), looms over the market.

Opec+ is set to boost output by 500,000 barrels per day (bpd) in January, and Russia supports another increase of the same amount in February after the group slashed its production in 2020 to support slumping oil prices. 


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