Commodities

Oil rises after stockpile draw amid hopes for Covid-19 vaccine

Reuters TOKYO | Updated on November 11, 2020

Oil futures rose on Wednesday after an industry report showed that US crude inventories fell by more than expected as prices continued to be supported by news of successful trials of a vaccine for coronavirus.

Brent crude was up 31 cents, or 0.7 per cent, at $43.92 a barrel by 0213 GMT, while US oil gained 36 cents, or 0.9 per cent, to $41.72 a barrel.

Crude stockpiles fell by 5.1 million barrels last week to about 482 million barrels, industry group data showed on Tuesday, compared with analysts' expectations in a Reuters poll for a reduction of 913,000 barrels.

“Defying analysts' expectations again, the American Petroleum Institute (API) reported on Tuesday a significant 'draw' in crude oil inventories,” said Stephen Innes, chief market strategist at AXI.

Gasoline inventories dropped by 3.3 million barrels, the API data showed, against expectations for a draw of 263,000 barrels in a Reuters poll.

Distillate fuel stocks, which include diesel and heating oil, were down by 5.6 million barrels versus expectations for a draw of 1.9 million barrels.

Oil prices also “continue to revel on the back of Pfizer's vaccine announcement,” Innes said.

Brent gained nearly 3 per cent on Tuesday, with US oil rising by a similar amount after initial trials data showed the experimental Covid-19 vaccine being developed by Pfizer Inc and Germany's BioNTech was 90 per cent effective.

Both Brent and US oil prices are up more than 10 per cent this week.

Published on November 11, 2020

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