A day after US crude stocks fell to their lowest level since September and the Dollar fell, oil rose to its highest level in three weeks.In a low-volume trading session on Thursday, futures in New York rose as much as 3%, owing to a lower Dollar, which improved commodities appeal. The US Energy Department announced a 4.58 million-barrel drop in crude stockpiles on Wednesday, sending a strong signal to investors and easing recent demand concerns.
“The market still has a bid following yesterday’s EIA report,” said Bob Yawger, director of Mizuho Securities USA’s futures division. He noted that the data alone offer markets a reason to trade considerably down in the coming days.
Due to contradictory supply and demand indicators, oil has bounced between losses and gains this week. While the outlook for consumption looks to be deteriorating as China, the world’s top oil importer, curbs holiday travel to battle omicron, things appear to be looking up in the United States.
Exports soared back beyond 3 million barrels per day, according to the US government data, which contradicted the IEA’s forecast, with traders moving barrels out of the nation to escape the impact of year-end taxes on stocks.”On one side, we got incredibly encouraging data from yesterday’s EIA report, robust suggested oil demand, and huge inventory declines across crude and oil products,” said Giovanni Staunovo, a commodity analyst at UBS Group AG. “The Fed, on the other hand, backed all risk assets on Thursday,” says the author.