Oil prices head to three-month peak after US crude inventories drop

SINGAPORE-Oil prices edged closer to achieving its third consecutive months of positively ended performance on Thursday, maintaining its momentum which started a week ago. Such followed after records disclosed that US crude inventories plummeted down while output reduction by major producers held supply steady.

Brent crude futures swiped out 1 cent to $66.16 per barrel at 0224 GMT while US Texas Intermediate (WTI) crude lost 3 cents to $60.90.Overall oil activity was still and unbothered with thin trading volume despite fresh news of US President Donald Trump’s impeachment forwarded by US House of Representatives.

Major decline was recorded with US crude inventories dropping 1.1 million barrels in the week to Dec. 13 while gasoline and distillates stockpiles performed well, according to data disclosed by Energy Information Administration.

“We’re near the top of trading ranges for both Brent and WTI so it’s interesting to see them holding here,” said Michael McCarthy, chief market analyst at CMC Markets.

While an uptrend is very much capable of achieving $61.50 per barrel, near-term risks are also inevitable given that price level will push traders to sell, McCarthy said.

“(Trading) volumes are terrible. A lot of people have given up for the year with no scheduled events to push oil markets around,” he said.

Strong oil activity sets oil prices running for its third week high brought heavily by announcements of intensive output reduction and fresh developments of “phase one” getting signed.

The trade pact between Washington and Beijing prevented further economic division and has improved global economic outlook as it increased the possibility of larger energy demand next year.

From previous week, the Organization of the Petroleum Exporting Countries and non-OPEC producers including Russia arranged new production cuts with 500,000 barrels per day from a total of 1.2 million barrels a day.