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Oil prices extend gains after U.S. inventory drop

Published 01/13/2021, 09:55 AM
Updated 01/13/2021, 10:00 AM
© Reuters.
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TOKYO, Jan 13 (Reuters) - Oil prices rose on Wednesday, with
U.S. crude gaining for a seventh day, after an industry report
showed a further drop in inventories and investors shrugged off
worsening developments in the pandemic.
U.S. West Texas Intermediate (WTI) CLc1 was up 40 cents,
or 0.8%, at $53.61 a barrel by 0128 GMT after gaining nearly 2%
on Tuesday. Brent crude LCOc1 was up 47 cents, or 0.8%, at
$57.05, having risen 1.7% in the previous session.
Both benchmarks are trading at the highest since February,
before the coronavirus outbreak in China began spreading across
the world and billions of people went into lockdowns to prevent
a pandemic that is now in a deadlier second wave.
Prices are shrugging off the latest developments in Europe
and the United States where death tolls and new infections keep
rising, with the focus on rollouts of vaccines, however patchy,
but risks to the market remain.
"U.S. shale producers' response to the rally in oil
represents the most significant near-term supply risk for oil,"
said Stephen Innes, chief global market strategist at Axi.
Falling inventories and rising oil prices are likely to
tempt U.S. drillers back into the fray, especially as Saudi
Arabia and other major producers cut their output, effectively
ceding market share to American producers.
Crude inventories in the U.S. dropped by 5.8 million barrels
last week to around 484.5 million barrels, data from the
American Petroleum Institute showed late on Tuesday. API/S
That was more than analysts' expectations in a Reuters poll
for a fall of 2.3 million barrels.



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