TOKYO (Reuters) – Oil climbed for a second day on Thursday in light holiday trading as a pullback in U.S. stock records of crude and gasoline pulled demand expectations, while suggestions of an upcoming Brexit deal raising investor risk appetite.
Brent crude futures rose 38 cents, or 0.7%, to $ 51.58 a barrel by 0530 GMT, while U.S. West Texas Intermediate (WTI) crude futures increased 31 cents, or 0.6%, to $ 48.43.
Both contracts gained more than 2% on Wednesday.
“Lower U.S. investments in fuel and fuel as well as signs of a Brexit deal that could lead to a weaker U.S. dollar were good news,” said Hiroyuki Kikukawa, general research manager at Nissan Securities.
“But there is great concern about a new version of the new benefits of coronavirus,” he said, adding that oil markets have been quiet with investors in holiday mode.
U.S. crude deposits fell 562,000 barrels per week to Dec. 18 to 499.5 million barrels, the Energy Information Administration said Wednesday.
Gasoline stocks fell by a staggering 1.1 million barrels to 237.8 million barrels, the EIA said, while distillate stocks fell by 2.3 million barrels to 148.9 million barrels.
Oil prices also drew support from news that Britain and the European Union were on the verge of striking a narrow trade deal on Thursday, moving away from a chaotic border to a Brexit split.
The potential stimulus was sterling, which was up 0.2% against the dollar after closing up 0.9%. A softer dollar makes green goods more affordable for other currency holders. [FRX/]
“Risk appetite among investors has also improved due to a change in global quotas, which confirms fears that a new variant of the coronavirus has declined slightly,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.
At least four drug dealers expect their COVID-19 vaccines to be effective against the new virus that is spreading rapidly in Britain and carrying out tests that should be tested in a few weeks.
However, some investors are still jittery about regaining oil demand as Americans have been warned again not to travel for Christmas as the latest rise in overcrowding matters on hospitals.
On the supply side, U.S. energy companies this week launched oil and natural gas rigs for the fifth week in a row.
The number of oil and gas rigs, an early sign of future output, rose 2 to 348 a week to Dec. 23, energy services firm Baker Hughes Co. said.
Reporting by Yuka Obayashi; Edited by Himani Sarkar and Richard Pullin