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.