Oil prices rose for the fourth day in a row on Thursday, as US crude, heating oil, and jet fuel stocks tightened just as a wintry blast hit the country and travel is expected to soar for the holiday season.
Brent crude futures rose 44 cents, or 0.54%, to $82.64 at 0422 GMT, extending previous-session gains of around 2.7%. West Texas Intermediate (WTI) crude futures in the United States rose 49 cents, or 0.63%, to $78.78 per barrel.
Both benchmark contracts rose on Wednesday after government data showed that US crude inventories fell much more than expected, with a 5.89 million barrel drop for the week ending Dec. 16.
Distillate stocks, which include heating oil and jet fuel, also fell, contrary to expectations for an increase.
The falling stockpiles come as a powerful winter storm hits the United States, with sub-zero wind chills expected as far south as Texas and record-breaking lows expected in Florida and eastern states.
With a post-COVID surge in travel for the end-of-year holiday season, jet fuel consumption is expected to rise as well.
“On our numbers … the crude market is finely balanced,” said Baden Moore, National Australia Bank’s head of commodity research.
“As we look into 2023, we see China’s re-opening and a likely continued steady roll-up in global jet demand (towards 2019 levels) will tighten global crude markets and drive prices higher,” he said.
Concerns about demand from China’s COVID-19 surge, as well as fears of a global recession, may keep oil futures in check.
“The gains look exaggerated, even with the unexpected draw in U.S. inventories,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
“The bearishness of demand worries is likely to prevail over any short-term props,” she said.
A senior World Health Organization official said on Wednesday that China may be struggling to keep an accurate count of COVID infections as the country experiences a large spike in cases, amid concerns about a lack of data from the country.
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