By Adedapo Adesanya
The Brent crude extended gains on Thursday to record its sixth consecutive rally at the global oil market, closing last night at its highest level in three months so far since mid-September, when the attack on Saudi Arabia Aramco oil fields drove oil prices up.
The price of the category of crude oil increased by 36 cents or 0.55 percent a day after data showed a weekly decline in U.S. crude inventories to trade at $65.59 per barrel. Also, the US West Texas Intermediate (WTI) crude was up by 29 cents or 0.48 percent to settle at $61.22 per barrel.
Business Post had reported on Wednesday that prices bounced back from early losses after the Energy Information Administration (EIA) announced in a report that US crude supplies fell by 1.1 million barrels for the week ended December 13.
This was less than the 2.5 million-barrel average decline expected by analysts’ poll by S&P Global Platts. The information from EIA came as a relief after the American Petroleum Institute (API) had earlier reported a 4.7 million-barrel climb.
The outlook of the market has been looking positive following the agreement reached by the US and China on the trade war between the world’s two biggest economies that has affected global demand for crude.
The US President, Mr Donald Trump, had personally announced a phase one deal last Friday and scrapped tariffs on Chinese goods that were set to go into effect on Sunday, December 15, because China agreed to targeted purchases of US goods.
In a further sign of establishing the new relations between both countries, China’s finance ministry on Thursday published a new list of six products from the United States that will be exempt from tariffs starting December 26.
Also, contributing to this recent rise in oil prices is the announcement about deeper output cuts by major crude producers under the platform of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers such as Russia.
The oil cabal agreed during its December 6 meeting in Vienna, Austria to deepen production cuts by a further 500,000 barrels per day (bpd) from January 1 on top of previous reductions of 1.2 million barrels per day.
Surprisingly, the news of President Donald Trump’s impeachment by the US House of Representatives failed to stir the oil market as price gains are expected to continue into the seventh session on Friday.
Dipo Olowookere