finance

Oil Jumps After Industry Group Reports U.S. Crude Supply Decline


2/2

© Bloomberg. Tanker trucks sit in front of storage silos in Sunray, Texas, U.S., on Saturday, Sept. 26, 2020. After all the trauma the U.S. oil industry has been through this year — from production cuts to mass layoffs and a string of bankruptcies — many producers say they’re still prioritizing output over reducing debt. Photographer: Angus Mordant/Bloomberg

2/2

(Bloomberg) — Oil extended gains after an industry group reported a larger-than-expected decrease in stockpiles.

Futures in New York rose in after-market trading after closing 0.8% higher on Tuesday amid thin liquidity. The American Petroleum Institute reported domestic crude inventories fell 4.79 million barrels last week. That would be the largest stockpile decrease since October if U.S. government data confirm it on Wednesday. Analysts in a Bloomberg survey expected a 3.1 million-barrel drop.

Prices had pared gains during the session, with equities weakening after Senate Republicans blocked an attempt by Democrats to increase direct stimulus payments in the newly enacted Covid-19 relief bill.

U.S. benchmark crude futures have risen almost 6% so far this month amid optimism around the development of Covid-19 vaccines, yet the timeline of a rollout is shaky. The pandemic continues to rage worldwide and threaten demand for fuels, with the virus making a comeback in Asia.

Higher stimulus checks could “invigorate oil demand,” said Bob Yawger, head of the futures division at Mizuho Securities. “Without the additional stimulus, it could be yet another drag on oil demand. That’s what is undermining oil futures now.”

OPEC+ will meet next week to decide on production levels for February. The producer group is set to add another 500,000 barrels a day of output to the market from January. Russia’s deputy prime minister has said the nation would support a further gradual increase in production in February.

©2020 Bloomberg L.P.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.  Learn more