Oil Prices Rise on Drop in US Crude Inventories

Oil prices rose on Wednesday, supported by a larger-than-expected drop in crude stocks in the United States and Britain’s approval of a second anti-Corona virus vaccine, but it is under pressure from dwindling hopes for a strong recovery in demand.

Brent crude futures, the global benchmark, ended the trading session up 25 cents, or 0.49%, to settle at 51.34 dollars a barrel, but they are still much lower than their level at the beginning of the year of 66 Dollars.

U.S. West Texas Intermediate crude futures rose 40 cents, or 0.83%, to settle at $ 48.40 a barrel, but they are also much lower than about $ 62 recorded at the beginning of 2020.

Prices recovered from their initial losses after a report from the US Energy Information Administration showed that crude inventories in the United States fell by 6.1 million barrels last week to 493.5 million barrels.

However, dealers indicated that US oil inventories are still ending the year, more than ten percent higher than the last week of 2019.

Oil prices received some support today from the decline of the US dollar against a basket of the currency to its lowest level since 2018, which makes the crude priced in the US currency cheaper for holders of other currencies.

The market is awaiting the meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, on January 4.

OPEC+ is working to trim record oil production cuts it implemented this year to support the market. The group is set to increase production by 500,000 bpd in January.