(Updates with settlement prices)
By Barani Krishnan
Investing.com - A beefy build in U.S. fuel stockpiles for a second week in a row didn't dissuade energy bulls from taking their legs off the gas pedal in the oil rally.
Determined to cover more ground from crude’s epic 13% collapse of the past two weeks and possibly bring the market back to above $80 a barrel, oil longs stayed the course on Wednesday, adding a little more to prices after the near 9% rebound of the past two sessions.
Stockpiles of U.S. gasoline and distillates rose heavily for a second week in a row in line with seasonal trends and as the Omicron variant of the coronavirus briefly impacted the confidence of energy traders, the Energy Information Administration’s Weekly Petroleum Status Report showed.
Inventories of gasoline, the most common fuel for automobiles in America, were up by 3.88 million barrels for the week ended Dec. 3, adding to the previous week’s 4.03 million. Analysts tracked by Investing.com had forecast a build of around 1.71 million barrels instead.
Stockpiles of distillates, commonly turned into the diesel used by trucks, buses, trains and ships and also as jet fuel, grew by 2.73 million barrels on top of the previous 2.16 million. Analysts had expected a rise of around 1.57 million barrels.
Aside from fuels, crude oil inventories also saw a smaller decline of 240,000 barrels last week compared with the previous week’s 910,000. Analysts had forecast a drop of 1.71 million barrels in crude oil stocks for the latest week.
The Cushing, Oklahoma hub that takes delivery of U.S. crude also saw a significant storage build of 2.4 million barrels for last week.
Consumption of fuels typically falls at this time of year due to seasonally-low autumn-winter driving by Americans.
The Omicron scare had also contributed to the negative psyche of energy markets over the past two weeks, driving oil prices down by more than 20% as the West Texas Intermediate benchmark for US crude hit four-month lows of under $63 a barrel.
The so-called WTI benchmark has rebounded since, to above $70 this week after global medical experts, including top US virologist Anthony Fauci, said at the weekend that early studies on Omicron showed its effects might not be as severe as initially feared. Pfizer (NYSE:PFE) and its partner BioNTech also said that three doses of their vaccine could neutralize the variant.
In Wednesday’s trade, WTI settled up 31 cents, or 0.4%, at $72.36 a barrel. The U.S. crude benchmark hit a four-month low of $62.48 last week on Omicron-related fears, after a seven-year high of $85.41 in mid October.
London-traded Brent, the global benchmark for oil, finished the session up 38 cents, or 0.5%, at $75.82. Brent fell to $65.80 last week, from a 2014 high of $86.70 in mid-October.
(Additional reporting by Sam Boughedda)