U.S. oil prices set for 8th session climb as domestic crude supplies drop by nearly 7 million barrelsLast Updated: Feb. 10, 2021 at 11:09 a.m. ET
First Published: Feb. 10, 2021 at 8:05 a.m. ET
By Myra P. Saefong and William Watts
Oil futures climbed Wednesday, with a nearly seven million-barrel weekly drop in U.S. crude supplies and expectations for another large round of government spending setting prices up to extend a winning streak that began at the start of February.
The Energy Information Administration reported Wednesday that U.S. crude inventories fell by 6.6 million barrels for the week ended Feb. 5.
The data compared with the average decline of 2.7 million barrels forecast by analysts polled by S&P Global Platts. The American Petroleum Institute on Tuesday reported a 3.5 million-barrel decrease.
“A combination of higher refining activity and lower imports” resulted in a draw to oil inventories, “and chunky one at that,” said Matt Smith, director of commodity research at ClipperData.
The EIA data also showed crude stocks at the Cushing, Okla., storage hub edged down by 700,000 barrels for the week.
Against that backdrop, West Texas Intermediate crude for March delivery CL.1, +0.51% CLH21, +0.51% rose 21 cents, or 0.4%, to $58.57 a barrel on the New York Mercantile Exchange, putting the U.S. benchmark on track for an eight-day winning streak.
April Brent crude BRN00, +0.64% BRNJ21, +0.64%, the global benchmark, was up 19 cents, or 0.3%, at $61.28 a barrel on ICE Futures Europe, on track to extend its winning streak to nine days in a row.
“As Brent prices rise above $60 a barrel, there is little reason to doubt that demand fundamentals will justify further recovery in oil prices to long term equilibrium of $65 a barrel and likely beyond by year-end as we are just starting to rev up the U.S. reflation trade engines,” said Stephen Innes, chief global markets strategist at Axi, in a note.
The so-called reflation trade is being driven by expectations for another large dose of fiscal stimulus by the U.S. with President Joe Biden calling for an aid package worth $1.9 trillion to boost recovery from the coronavirus pandemic. A final package is expected to be shy of that price tag but closer to it than had previously been expected.
Meanwhile, the EIA data also revealed that gasoline supply climbed by 4.3 million barrels, while distillate stockpiles were down 1.7 million barrels for the week. The S&P Global Platts survey had forecast a smaller supply increase of 2.7 million barrels for gasoline, and a decline of 1.7 million barrels for distillate inventories. |
