Oil prices climb as US oil inventories fall

Crude oil inventories in US fall by 600,000 barrels for week ending Dec. 18

Oil prices climb as US oil inventories fall

Oil prices increased on Thursday over a fall in US oil stocks and a decline in the US first-time jobless claims, as both signal a possible oil demand and economic rebound.

International benchmark Brent crude traded at $51.42 per barrel at 0642 GMT for a 0.35% increase after closing Wednesday at $51.24 a barrel. 

At the same time, American benchmark West Texas Intermediate (WTI) traded at $48.28 a barrel for a 0.33% increase after ending the previous session at $48.12 per barrel.

 A decline in US crude oil inventories last week is driving the upward trend in oil prices, signaling a rebound in crude demand in the US, the world's largest oil consumer.

Commercial crude oil inventories in the US dropped by 600,000 barrels last week relative to the market expectation of a 3.2 million-barrel draw. A surprise drop in gasoline stocks was also seen with a fall of 1.1 million barrels to 237.8 million barrels.

Further buoying bullish oil prices, the US first-time claims for unemployment benefits last week fell by 89,000 from last week to 803,000, marking its lowest level in three weeks, a sign that the job market is beginning its rebound from the coronavirus pandemic.

However, oil prices are still under pressure due to a new, potentially more infectious variant of the novel coronavirus, as investors fear oil demand could remain weaker for longer.

The UK announced last week a fast-spreading new strain of the COVID-19 in southern England.

While the World Health Organization requested that countries redouble their health measures in light of the new strain, several countries shut their borders and some others stopped flights with the UK.

According to data from Johns Hopkins University on Thursday, the number of cases worldwide has now reached over 78.7 million.

The US still tops the number of cases above 18.4 million, while cases in India now total over 10.1 million, and Brazil follows with over 7.3 million cases.