Oil Prices Climb as U.S Inventories Decline Stimulates Demand

Oil prices climbed marginally as commodity data reveals U.S inventories declined which has stimulated demand sentiment.

Brent crude rose to $79.20 a barrel representing a 0.3% percentage increase as at 07:59 GMT. The U.S. West Texas Intermediate (WTI) crude climbed 19 cents, or 0.2%, to $76.17 a barrel.

OANDO commodity analyst Jeffrey Halley stated “Some long-covering is evident in Asia today in an otherwise nondescript session,”

Data from the American Petroleum Institute showed U.S. crude stocks fell by 3.1 million barrels in the week ended Dec. 24. Furthermore, Gasoline inventories registered a  319,000 barrels decline, while distillate stocks dropped by 716,000 barrels compared with hopes of a 200,000 barrels drop.

Oil prices have been underpinned by three oil producers declaring forces majeure this month on part of their oil production because of maintenance issues and oilfield shutdowns.

Russian Deputy Prime Minister Alexander Novak, in charge of Moscow’s ties with the OPEC+ group of oil producers, has said that the group has resisted calls from Washington to boost output because it wants to provide the market with clear guidance and not deviate from policy.

Meanwhile, Investors are awaiting an OPEC+ meeting on Jan. 4, at which the alliance will decide whether to go ahead with a planned production increase of 400,000 bpd in February.