Oil held gains near the highest level in more than three months on indications of shrinking U.S. crude stockpiles and optimism in the global economic outlook.
Futures rose as much as 0.3% in New York after adding 0.9% on Thursday, set for the biggest monthly increase since January. American crude stockpiles fell by 1.5 million barrels last week, according to a Bloomberg survey before government data on Friday. Jobless claims in the U.S. fell to a three-week low, reflecting a solid labor market in the world’s no. 1 economy.
Oil is up about 12% this month after the U.S. and China made a breakthrough in their prolonged trade dispute and as the Organization of Petroleum Exporting Countries and its allies agreed to deepen output cuts. The American Petroleum Institute reported Tuesday that crude stockpiles dropped by 7.9 million barrels last week, according to Reuters, which would be the largest draw since August if confirmed by official data.
“We have some good economic data coming out of the U.S. and there’s some buying euphoria,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. “Crude has been on a steady upward trend from October when the U.S. and China first discussed a trade deal, and in the absence of any risk on the horizon, markets are trading on the back of this optimism.”
West Texas Intermediate for February delivery rose 16 cents to $61.84 a barrel on the New York Mercantile Exchange as of 1:05 p.m. Singapore time. The contract added 57 cents to settle at $61.68 on Thursday, the highest level since Sept. 16. Prices are also heading for a fourth weekly advance, the longest run of gains since April.
Brent for February settlement climbed 9 cents to $68.01 a barrel on the ICE Futures Europe exchange. Prices are up about 9% this month. The spread between the global benchmark crude traded at a $6.18 premium to WTI.
The Energy Information Administration is forecast to report a second weekly decline in crude stockpiles. American inventories are shrinking even as the nation pumps oil at near-record levels and shale explorers boost drilling. Separately, U.S. jobless claims dropped to 222,000 in the week ended Dec. 21 from 235,000, according to Labor Department figures released Thursday.
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