Oil futures nudged higher Wednesday, finding support as traders remained optimistic about prospects for a new round of aid spending out of Washington while looking past data from an industry trade group showing a large rise in U.S. crude inventories.
West Texas Intermediate crude for January delivery rose 14 cents, or 0.3%, to $45.74 a barrel on the New York Mercantile Exchange. February Brent crude rose 24 cents, or 0.5%, to $49.08 a barrel on ICE Futures Europe.
“Despite persistent concerns about demand, oil prices are still holding their own and this morning are priced close to their recent multi-month highs,” said Eugen Weinberg, commodity analyst at Commerzbank, in a note.
Oil surged higher in November, looking past a sharp rise in COVID-19 cases as investors cheered progress toward vaccines and prospects of a fuller economic reopening in 2021 despite prospects of a near-term hit to fuel demand.
New infections continue to accelerate, but analysts said prospects for a new round of aid spending. U.S. Treasury Secretary Steven Mnuchin on Tuesday offered a $916 billion package to House Speaker Nancy Pelosi, D-Calif., that would include a $600 direct payment to most Americans but eliminate a $300 a week unemployment benefit favored by a bipartisan group of Senate negotiators.
Pelosi said there had been progress, but called dropping the supplemental jobless benefits unacceptable.
The American Petroleum Institute reported late Tuesday that U.S. crude supplies rose by 1.1 million barrels for the week ended Dec. 4, according to sources. The data also showed gasoline supplies up by 6.4 million barrels, while distillate inventories climbed by 2.3 million barrels. Crude stocks at the Cushing, Okla., storage hub, meanwhile, edged down by nearly 1.85 million barrels for the week, sources said.
More closely followed inventory data from the Energy Information Administration will be released Wednesday morning. On average, the EIA data are expected to show crude inventories down by 700,000 barrels last week, according to a survey of analysts conducted by S&P Global Platts, which also forecast supply increases of 2.2 million barrels for gasoline and 1.2 million barrels in distillates.