Oil edges up to three-month highs as U.S. crude stocks fall

By Collin Eaton HOUSTON (Reuters) - Oil prices rose on Friday to three-month highs after data showed U.S. crude inventories declined much more than expected and upbeat economic data and optimism over a U.S.-China trade deal improved investor sentiment.

Reuters December 28, 2019 00:07:52 IST
Oil edges up to three-month highs as U.S. crude stocks fall

Oil edges up to threemonth highs as US crude stocks fall

By Collin Eaton

HOUSTON (Reuters) - Oil prices rose on Friday to three-month highs after data showed U.S. crude inventories declined much more than expected and upbeat economic data and optimism over a U.S.-China trade deal improved investor sentiment.

Brent crude was up 31 cents at $68.23 a barrel at 10:47 a.m. CST (1647 GMT). West Texas Intermediate was up 13 cents at $61.81 a barrel.

U.S. crude stocks fell by 5.5 million barrels in the week to Dec. 20 to 441.4 million barrels, the Energy Information Administration said on Friday. The inventory decline far exceeded the 1.7-million-barrel drop expected by analysts in a Reuters poll.

"Inventories are bullish almost across the board," said Josh Graves, senior market strategist at RJO Futures in Chicago, adding a year-end jump in stock prices has helped lift oil prices as consumer sentiment improved this month.

"It's a Santa Claus rally. People tend to buy more things that will indirectly drive the price of oil up," Graves said.

Oil trade was thin. But upbeat economic data from China and the United States and optimism over a trade deal between the two major economies improved investor sentiment.

In the United States, a survey on Thursday showed online holiday purchases by U.S. consumers reached a record, beating analysts' expectations and lifting U.S. stocks to fresh highs.

Profits at China's industrial firms rose at the fastest pace in eight months in November, data from the National Bureau of Statistics showed.

China and the United States cooled their 17-month long trade war earlier this month, announcing a Phase 1 agreement that would reduce some U.S. tariffs in exchange for more Chinese purchases of American farm products.

Brent has jumped more than a quarter in 2019, while WTI is up around 35%, bolstered by the group's output cuts.

OPEC+ this month decided to prolong an oil output restriction deal until the end of March and to deepen the cuts in order to balance out the oil market.

The Organization of the Petroleum Exporting Countries and its allies including Russia, known as OPEC+, may consider wrapping up their oil output reduction in 2020, Russian Energy Minister Alexander Novak said on Friday.

"Novak's comments changed the outlook a little bit. But the market has to remember that Russia always talks down the cuts. It's their way of negotiating with OPEC," said Phil Flynn, an analyst at Price Futures Group in Chicago.

(Additional reporting by Bozorgmehr Sharafedin in London and Aaron Sheldrick in Tokyo, editing by Nick Macfie and Alistair Bell)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.