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Oil jumps more than 2% after U.S. inventory draw - CNBC

A woman wearing a face mask walks on the ocean front while oil tankers are seen anchored off the coast of Long Beach, California, after sunset on April 25, 2020.
Apu Gomes | AFP | Getty Images

Oil prices rose more than 2% on Wednesday, boosted by draws in U.S. inventories of crude, gasoline and distillates that lifted investors' hopes for some return in fuel demand.

Brent crude futures gained $1.12, or 2.24%, to settle at $51.20 per barrel, while West Texas Intermediate (WTI) crude futures settled 2.34%, or $1.10, higher at $48.12 per barrel.

U.S. crude inventories fell by 562,000 barrels in the week to Dec. 18 to 499.5 million barrels, the Energy Information Administration said on Wednesday.

Gasoline stocks fell by a surprise 1.1 million barrels in the week to 237.8 million barrels, the EIA said, while distillate stockpiles fell by 2.3 million barrels in the week to 148.9 million barrels, more than expected.

"Overall, what this report reflects is that we're starting to see continued improvement in demand," said Phil Flynn, senior analyst at Price Futures Group in Chicago. "It reflects that we're seeing a market that's getting more in balance."

A falling U.S. dollar also supported prices. A weak greenback makes dollar-denominated commodities such as crude oil cheaper to holders of other currencies.

Investors also kept an eye on Nigeria, where supply disruptions helped lift prices. Exxon Mobil Corp issued a force majeure on the Qua Iboe crude oil export terminal last week after a fire hit the facility and injured two workers.

A source told Reuters production is expected to resume in early January.

The stream was expected to load about 180,000 barrels per day (bpd) in December and 150,000 bpd in January.

Still, oil markets remain jittery about the future recovery of oil demand as a new, highly infectious variant of the novel coronavirus has hit Britain, prompting a slew of countries to shut their borders to the country.

The number of Americans filing first-time claims for unemployment benefits unexpectedly fell last week, though remained elevated as more businesses faced restrictions and consumers hunkered down amid rising COVID-19 cases.

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Oil jumps more than 2% after U.S. inventory draw - CNBC
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