Oil Extends Gains After Report Points to Easing U.S. Stockpiles, , on November 11, 2020 at 2:42 am

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On November 11, 2020
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(Bloomberg) — Oil extended gains toward $42 a barrel in New York after an industry report pointed to a bigger-than-expected decline in U.S. crude stockpiles, adding to bullish momentum after a vaccine breakthrough.The American Petroleum Institute reported crude inventories dropped by 5.15 million barrels last week, with gasoline and diesel stockpiles also decreasing, according to people familiar with the data. Official government figures are due Thursday. While early findings on a vaccine showed it protected most people from Covid-19, it’s likely to take some time to roll out if it proves effective.Oil has rallied more than 11% over the past two days, buoyed initially by the election of Joe Biden as U.S. president and followed by a broader market surge on the vaccine news. The gains have come even as Covid-19 infections surged in Europe and the U.S., with Italy reporting the most fatalities since April and American cities including San Francisco announcing new restrictions.“The giddy risk-on trade of the past couple of days is pricing in future hope, but not the immediate practicalities and realities of a worsening virus surge on both sides of the Atlantic,” said Vandana Hari, founder of Vanda Insights in Singapore. The timing and access to a potential Covid-19 vaccine point to plenty of challenges, she added.Brent’s three-month timespread was 79 cents a barrel in contango — where prompt prices are cheaper than later-dated ones. That’s the smallest contango since July, signaling concerns about over-supply have eased.U.S. gasoline stockpiles dropped by 3.3 million barrels last week, while distillate inventories, which includes diesel, shrank by 5.62 million barrels, the API reported Tuesday. The median estimate in a Bloomberg survey forecast nationwide crude stockpiles fell by 1.9 million barrels.However, there are reasons to be wary of the latest price surge. Goldman Sachs Group Inc. said fresh virus outbreaks will present a speed bump, while BMO Capital Markets said it is “too soon” for $50 oil as the market contends with returning Libyan output. The next major event for the market is the OPEC+ meeting at the end of the month, with Vitol Group predicting a major draw on excess global inventories if the group delays a planned easing of cuts.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.,

Oil Extends Gains After Report Points to Easing U.S. Stockpiles(Bloomberg) — Oil extended gains toward $42 a barrel in New York after an industry report pointed to a bigger-than-expected decline in U.S. crude stockpiles, adding to bullish momentum after a vaccine breakthrough.The American Petroleum Institute reported crude inventories dropped by 5.15 million barrels last week, with gasoline and diesel stockpiles also decreasing, according to people familiar with the data. Official government figures are due Thursday. While early findings on a vaccine showed it protected most people from Covid-19, it’s likely to take some time to roll out if it proves effective.Oil has rallied more than 11% over the past two days, buoyed initially by the election of Joe Biden as U.S. president and followed by a broader market surge on the vaccine news. The gains have come even as Covid-19 infections surged in Europe and the U.S., with Italy reporting the most fatalities since April and American cities including San Francisco announcing new restrictions.“The giddy risk-on trade of the past couple of days is pricing in future hope, but not the immediate practicalities and realities of a worsening virus surge on both sides of the Atlantic,” said Vandana Hari, founder of Vanda Insights in Singapore. The timing and access to a potential Covid-19 vaccine point to plenty of challenges, she added.Brent’s three-month timespread was 79 cents a barrel in contango — where prompt prices are cheaper than later-dated ones. That’s the smallest contango since July, signaling concerns about over-supply have eased.U.S. gasoline stockpiles dropped by 3.3 million barrels last week, while distillate inventories, which includes diesel, shrank by 5.62 million barrels, the API reported Tuesday. The median estimate in a Bloomberg survey forecast nationwide crude stockpiles fell by 1.9 million barrels.However, there are reasons to be wary of the latest price surge. Goldman Sachs Group Inc. said fresh virus outbreaks will present a speed bump, while BMO Capital Markets said it is “too soon” for $50 oil as the market contends with returning Libyan output. The next major event for the market is the OPEC+ meeting at the end of the month, with Vitol Group predicting a major draw on excess global inventories if the group delays a planned easing of cuts.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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