Oil held gains near the highest close in over three months after U.S. crude stockpiles declined more than expected.
Futures were little changed in New York after capping a fourth weekly advance on Friday, the longest run of weekly gains since April. American crude supplies fell by 5.47 million barrels through the week ended Dec. 20, more than three times the median estimate in a Bloomberg survey. Hedge funds remain upbeat on prices, increasing bullish wagers on Brent oil to a seven-month high.
Oil is poised for the biggest yearly gain since 2016, boosted recently by a breakthrough in U.S.-China trade talks and a commitment by the Organization of Petroleum Exporting Countries and its allies to deepen output cuts. The market has shrugged off comments from Russian Energy Minister Alexander Novak on Friday that OPEC+ would discuss ending supply curbs next year.
“We have probably seen the best of the oil rally,” said Jeffrey Halley, senior market analyst at Oanda in Singapore. Prices should remain well supported into January but I don’t see a comprehensive trade agreement between the U.S. and China in 2020, that would be a miracle, he added.
West Texas Intermediate for February delivery rose 6 cents to $61.78 a barrel on the New York Mercantile Exchange as of 7:20 a.m. in London. The contract gained 4 cents to close at $61.72 on Friday, the highest since Sept. 16. Prices are also set for the biggest monthly gain since January.
Brent crude for February settlement added 19 cents, or 0.3%, to $68.35 a barrel on London’s ICE Futures Europe exchange. The contract rose 3.1% last week. The global benchmark crude is trading at a $6.57 premium to WTI.
U.S. crude inventories fell for a second straight week to the lowest level in two months, despite the first dip in exports since late November, according to Energy Information Administration data on Friday. Gasoline stockpiles rose for a seventh week to the the highest since mid-March.
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