Oil extends gains after fall in US stocks
Brent rises after an industry report shows a further drop in inventories and investors shrug off worsening developments in the pandemic
Tokyo — Oil prices rose on Wednesday, with US crude gaining for a seventh day, after an industry report showed a further drop in inventories and investors shrugged off worsening developments in the pandemic.
US West Texas Intermediate (WTI) was up 40c, or 0.8%, at $53.61 a barrel by 1.28am GMT after gaining nearly 2% on Tuesday. Brent crude was up 47c, or 0.8%, at $57.05, having risen 1.7% in the previous session.
Both benchmarks are trading at the highest since February, before the coronavirus outbreak in China began spreading across the world and billions of people went into lockdowns to prevent a pandemic that is now in a deadlier second wave.
Prices are shrugging off the latest developments in Europe and the US where death tolls and new infections keep rising, with the focus on rollouts of vaccines, however patchy, but risks to the market remain.
“US shale producers’ response to the rally in oil represents the most significant near-term supply risk for oil,” said Stephen Innes, chief global market strategist at Axi.
Falling inventories and rising oil prices are likely to tempt US drillers back into the fray, especially as Saudi Arabia and other major producers cut their output, effectively ceding market share to American producers.
Crude inventories in the US dropped by 5.8-million barrels last week to about 484.5-million barrels, data from the American Petroleum Institute showed late on Tuesday.
That was more than analysts’ expectations in a Reuters poll for a fall of 2.3-million barrels.
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