Oil prices hold above $50 on US stocks draw, imminent Brexit deal hopes
Oil prices edged down on Thursday but were holding well above $50 per barrel in light holiday trade as a drop in US stockpiles spurred demand hopes, while hints of an imminent Brexit deal underpinned investors’ risk
appetite.
Brent crude futures were down 40 cents, or 0.8 percent, to $50.80 a barrel at 1100 GMT, while U.S. West Texas Intermediate (WTI) crude was down 36 cents, or 0.75 percent, to $47.76.
Both contracts gained more than 2 percent on Wednesday.
“Lower US inventories of crude and fuels as well as signs of a potential Brexit deal which led to weaker US dollar were good news,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
“But lingering worries over a new variant of the novel coronavirus capped gains,” he said, adding oil markets were quiet with investors in holiday mode.
Gasoline stocks fell by a surprise 1.1 million barrels to 237.8 million barrels, the EIA said, while distillate stockpiles fell by a more-than-expected 2.3 million barrels to 148.9 million barrels.
Oil prices also drew support from news that Britain and the European Union were on the cusp of striking a narrow trade deal, swerving away from a chaotic finale to the Brexit split.
“Risk appetite among investors improved also because of a rebound in global equities, which underlined that fears over a new variant of the coronavirus have receded a little,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.
At least four drugmakers expect their COVID-19 vaccines will be effective against the new fast-spreading variant of the virus that is raging in Britain, and are performing tests that should provide confirmation in a few weeks.
On the supply side, US energy firms this week added oil and natural gas rigs for a fifth week in a row.
