Investing.com - The sparse trading volumes for the holidays seem to be working well for oil bulls who found little resistance pushing prices to 3-½ month highs on Thursday on industry data suggesting a steep crude inventory drop last week.
Talk that China was staying in close touch with the United States as they continued to work through their purported phase one trade deal also bolstered crude prices as U.S. markets reopened after the Christmas break.
New York-traded West Texas Intermediate, the U.S. crude benchmark, settled up 57 cents, or nearly 1%, at $61.68 per barrel. WTI earlier hit $61.83, its highest level since mid-September.
Brent, the global oil benchmark, settled up 72 cents, or 1%, at $67.92. It earlier hit a 3-½ month high of $67.94.
Crude oil prices spiked as traders reacted belatedly to a late Tuesday report from the American Petroleum Institute (API) that showed a drawdown of 7.9 million barrels in U,S, crude stockpiles for the week ended Dec. 20, versus the 1.8-million-barrel decline forecast by analysts.
The API data suggests that refiners turned out more gasoline and other fuel products last week in anticipation of higher road travel and package deliveries for the holiday season. The API, however, is only an industry group and its data will have to be affirmed by official numbers due from the U.S. Energy Information Administration on Friday.
Oil prices also rose as stocks on Wall Street hit record highs on Thursday after China’s Commerce Ministry spokesman Gao Feng told a media briefing that Beijing was in close touch with the United States on a tentative phase one trade deal between the two countries.
Wall Street, a proxy for oil market sentiment, has had one of its biggest and most prolonged bull runs this year on optimism over the imminent China deal as well as runaway jobs growth and other strong U.S. economic data.