Oil rose further above $67 a barrel to its highest in over three months on Thursday, buoyed by a report showing lower US crude inventories, hopes of an end to the China-US trade dispute and Opec-led efforts to constrain supply.
The American Petroleum Institute, an oil industry group, said late on Tuesday that US crude stocks fell 7.9 million barrels last week, much more than the decline forecast by analysts.
Brent crude, the global benchmark, reached $67.52 a barrel, the highest since September 17. West Texas Intermediate crude gained 11 cents to $61.22.
“Prices for now are still supported,” said Olivier Jakob, oil analyst at Petromatrix.
“It’s difficult to go against that trend during the holiday period.”
Trading volume remains low because of the Christmas holidays, which have delayed the release of the US government’s official oil inventory report by two days until Friday.
Also supporting prices, US President Donald Trump said on Tuesday that he and Chinese President Xi Jinping would have a signing ceremony for the so-called Phase 1 agreement to end their trade dispute that was put together earlier this month. The roughly 17-month trade war between the world’s two largest economies has hit global growth and demand for oil, weighing on crude prices for most of the year.
Even so, Brent has still rallied 25 per cent in 2019, supported by supply cuts by the Organisation of Petroleum Exporting Countries and allies including Russia. The so-called Opec+ group agreed this month to extend and deepen production cuts that would take as much as 2.1 million barrels per day of supply off the market as on January 1, or roughly 2 per cent of global demand.
Rupee weakens
The steady rise in crude oil prices caused the rupee to settle at a three-week low of 71.31 against the US currency on Thursday.
The rupee opened higher at 71.26 against the dollar. During the day, the unit fluctuated between a high of 71.22 and a low of 71.35 and settled at 71.31 against the dollar, lower by 4 paise over its previous close of 71.27 on Tuesday.
