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Oil Dips But Clinches 6th Winning Week, Defying Huge U.S. Builds

CommoditiesDec 11, 2020 04:10PM ET
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By Barani Krishnan

Investing.com - Oil prices fell on Friday but still rose for a sixth straight week after longs in the market ignored creeping U.S. crude stockpiles and weakening demand for fuels on the notion these will sort out once coronavirus vaccines get more people out and the economy moving.

New York-traded West Texas Intermediate, the leading indicator for U.S. crude, settled down 21 cents, or 0.5%, at $46.57 per barrel. For the week though, WTI rose 0.7%. On Thursday, it hit a nine-month high of $47.73, a dramatic reversal from minus $40 levels hit in April, with the advent of the Covid-19. 

London-traded Brent, the global benchmark for crude, finished Friday’s trade down 28 cents, or 0.6%, at $49.97 per barrel. Brent hit a March high of $51.05 on Thursday, crossing the $50 mark the first time since the pandemic-induced market crash that took Brent below $15 per barrel in April.

Oil prices have been on a tear over the past six weeks, gaining as much as $13 per barrel, on bets that people across the world might soon be able to travel freely as millions of doses of coronavirus vaccines were being prepared for delivery over the course of the next few weeks, after approval by relevant health authorities.

But this week’s rally has been particularly troubling. It ignored a monstrous build in domestic crude stockpiles reported by the U.S. government for last week. 

U.S. crude inventories rose by 15.2 million barrels for the week ended Dec. 4, the Energy Information Administration said on Wednesday, versus analysts' expectations for a 1.42 million-barrel drawdown instead.  

The crude build wasn’t the only one announced by the EIA.

Distillate stockpiles, which include diesel and heating oil, rose by 5.2 million barrels during the week ended Dec. 4, against expectations for a 1.41 million barrel increase, the agency’s data showed.

U.S. gasoline inventories rose by 4.22 million barrels last week the EIA said, compared with expectations for a 2.27 million-barrel build.

 

Oil Dips But Clinches 6th Winning Week, Defying Huge U.S. Builds
 

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Comments (3)
Joel Schwartz
Joel Schwartz Dec 11, 2020 8:38PM ET
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Oil will be worthless in a few years. This is the squeeze before then. Only question is how long it lasts.
Peter North
Peter North Dec 11, 2020 8:28PM ET
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The US Energy dept are complete liars with their bogus EIA reports they release weekly to control the price of oil.
Chuck Tupa
Chuck Tupa Dec 11, 2020 4:32PM ET
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why the oil bulls ignore the 15.2 mil barrel build isquite fishy. we should expect a huge drop in oil prices over the weekend .
Barani Krishnan
Barani Krishnan Dec 11, 2020 4:32PM ET
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Good point, Chuck. It's DE.LUSIONAL to think these vaccines will overnight flick consumption for oil on like a switch.
Thet Aung
Thet Aung Dec 11, 2020 4:32PM ET
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not all over the world
 
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