This post was originally published on this site
Oil futures traded near unchanged Wednesday, moving between gains and losses after finding some temporary support in the wake of data showing a larger-than-expected drop in U.S. crude inventories.
West Texas Intermediate crude for February delivery CL.1, +0.54% CLG21, +0.54% was up 4 cents, or 0.1%, at $48.04 a barrel on the New York Mercantile Exchange, after trading as high as $48.66. February Brent crude BRN00, +0.43%, the global benchmark, was up 10 cents, or 0.2%, at $51.19 a barrel on ICE Futures Europe.
The Energy Information Administration said crude stocks dropped by 6.1 million barrels in the week ended Dec. 25. Analysts surveyed by S&P Global Platts, on average, had looked for crude stocks to fall by 3.8 million barrels, while the American Petroleum Institute, an industry trade group, on Tuesday had reportedly seen a 4.8 million barrel drop.
Oil was buoyed by the report, but gains faded. Thin, holiday-type trading conditions in the penultimate session of 2020 and a raft of “competing headlines” made for the volatile price action, said Phil Flynn, analyst at Price Futures Group. Markets will be closed Friday for the New Year’s Day holiday.
While investors applauded the EIA data, which also showed gasoline inventories fell for a second week amid a strong pickup in demand, upside was limited by the detection in Colorado of a more contagious variant of the coronavirus that causes COVID-19, he said.
Flynn said crude was briefly lifted ahead of the EIA data by news reports that the U.S. military flew nuclear-capable B-52 bombers to the Middle East Wednesday amid continued tensions with Iran and Iran-backed militias in Iraq.
The EIA said gasoline inventories fell by 1.2 million barrels, while distillate inventories rose 3.1 million barrels. Analysts surveyed by S&P Global Platts had expected gasoline inventories to show a rise of 2.3 million barrels and distillate stocks to rise by 1.3 million barrels.
Crude saw little change after oil-field services firm Baker Hughes reported that the number of U.S. rigs rose by 3 this week to 267.
Oil was also underpinned by a weaker U.S. dollar, analysts said. The ICE U.S. Dollar Index DXY, -0.37%, a measure of the currency against a basket of six major rivals, was down 0.3%. A weaker dollar is typically seen as a positive for commodities, making them cheaper to users of other currencies.
February natural-gas futures NGG21, -1.31% fell 1.5% to $2.407 per million British thermal units.
January gasoline futures RBF21, +1.58% rose 1.4% to $1.407 a gallon, while January heating oil HOF21, -0.11% was down 0.3% at $1.4827 a gallon.
