After the gloomy inventory buildup last week, the US Energy Information Administration reports an unexpected draw.
For the week through November 20, 754,000 barrel draw was recorded while gasoline stocks rose by 2.2 million barrels.
The update provided an instant cushion for the crude prices. This comes amid recent optimistic news on vaccine development and a swifter administration transition.
Brent futures added 0.9% or 45 cents after adding an impressive 1.6% in the previous session. It settled at $49.06 per barrel.
Consequently, the West Texas Intermediate crude followed suit with a 0.7% increase.
The US benchmark gained a robust 1.8% on Wednesday’s trading and is currently priced at $46.05 per barrel.
Both of the leading benchmarks rallied by 9% so far in the week, lifting them away from the $40 per barrel critical threshold on which they settled in for long.
The report came after API inspection, released a day earlier, reported an 8-million barrel build-up for the period.
This did not come as a surprise as the United States observes the Thanksgiving Holiday and many people are staying in the comforts of their homes.
Conversely, the EIA report resulted in an unprecedented hike in price, which is bigger than spectators expected.
On the other hand, commodity trading experts noted that while oil price currently follows an uptrend, a bullish pattern is not yet consolidating.
With the still rising stockpile of gasoline, it is not yet time for a victory dance, experts added.
Nevertheless, there still nothing that could rain on the market’s parade along with the vaccine prospects.
Business as Usual: We are Coming Back to Normal
Investors are expecting a back-to-normal scheme after only a few months that an effective vaccine enters into force.
This could, in turn, lift demand back to the pre-pandemic level, which is bullish for the oil price.
The successive positive updates from leading pharmaceutical and biotechnology companies pushed aside concerns on the growing number of infection cases.
The United States still leads the charts with the most number of cases, recording 2.3 million new infections in the last 14 days.
Currently, traders are looking past the containment measures that are in place, which prompts a buying purge for crude stocks.
For a brief context, US crude stockpiles fell by 754,000 barrels in the previous week compared to the predicted 127,000 inventory rise.
However, gasoline orders remain their weakest since June after demand fell by 8 million barrels per day.
The recent report by US Energy Information Administration shows that while crude makes a gradual comeback, its counterpart further sinks the hole.
