Brent Crude Rises Further

WTI crude oil futures rose to over $70.5 per barrel on Friday amid a fresh decline in US oil inventories, while markets assessed the outlook of Chinese demand and whether higher supply from non-OPEC+ will drive the global market to a surplus next year.

New data from the EIA showed that crude oil stocks fell by 4.3 million barrels from the previous week on the period ending December 20th, the fifth straight decline, and more than market expectations of a 2 million barrel draw and an earlier industry report of a 3.2 million barrel draw.

Still, WTI futures are set to drop 1% this year.

Increasingly pessimistic economic signals from China supported bets that fuel demand from the world’s top crude importer will slow.

In turn, higher supply from Canada, the US, and Brazil may offset the prolonged output cuts from OPEC+ members.

Still, uncertainty remains as US President-elect Trump may support domestic production while tightening sanctions on Iran’s energy exports.

Advocates for biofuels are unsettled regarding developments expected to shape them as an alternative to fossil fuels. Not only did any legislation making E15 — gasoline blended with 15% ethanol — year round get scrapped from the spending bill signed by President Biden last week, but the D.C. Court of Appeals vacated denials of waivers to some gasoline producers by the EPA, allowing those producers to blend less biofuels into their production. CBOT grain traders see these as negative, putting a damper on growth hopes for the U.S. biofuels market, says Jack Scoville of Price Futures Group in a note. This is being felt most in futures for soybeans and related products, with soybeans down 0.7%. (kirk.maltais@wsj.com)

Gasoline futures climbed above $1.90 per gallon, driven by strong holiday travel demand, with a record 119 million Americans expected to travel, including 107 million by car.

According to the EIA, gasoline demand rose to 8.92 million barrels per day (b/d) from 8.81 million b/d the previous week.

Globally, energy demand prospects received a boost from China's economic stimulus measures and the World Bank's upward revision of China's growth forecast. However, supply-side constraints persisted as domestic gasoline production averaged 9.9 million b/d, slightly below prior levels, and unplanned outages in the Gulf of Mexico due to hurricanes, further tightened supplies.

Adding to this, crude oil inventories sharply declined by 4.24 million barrels, exceeding the anticipated 2-million-barrel draw, signaling broader supply constraints.

On the other hand, easing upward pressure on prices, gasoline inventories rose by 1.63 million barrels, surpassing expectations for a 1-million-barrel draw.

Copper decreased below 4, according to trading on a contract for difference (CFD).

Copper decreased 2.03% to 3.9983 USD/Lbs

Crude oil and refined product futures prices were up in late Friday morning trading and all contracts were on track for week-to-week gains.

Volumes were relatively light at the end of the holiday week, with most activity for Brent crude and refined products focused on next-month contracts.

The NYMEX February West Texas Intermediate crude contract was up by 74cts to $70.36/bbl at about 11:15 a.m. ET and the March WTI contract was 70cts higher at $69.93/bbl. Brent crude gains were lighter. The February Brent contract was up by 68cts to $73.94/bbl and the March contract was 60cts higher at $73.54/bbl. Crude prices are heading into the afternoon up by about 1.2% week to week.

ULSD futures, which settled lower in each of the last five sessions, were also higher. The lightly traded NYMEX January ULSD contract was up by 3.72cts to $2.2425/gal while the more-active February contract was 3.93cts higher at $2.2495/gal. The front-month contract is on course to end the week with a 0.5% gain.

Gasoline futures, which were choppy this week, were up by about 1% in morning trading with the NYMEX January RBOB contract up by 0.97ct to $1.9555/gal and February 0.98cts higher at $1.967/gal. The front-month contract is trading about 1.3% above where it settled on Dec. 20.

Oil prices are receiving support Friday from optimism over Chinese efforts to spur their economy and the World Bank raising its forecast for economic growth in China this year and next. Disappointing Chinese energy demand has weighed on oil prices for much of the year.

Markets are also awaiting the 1 p.m. ET release of weekly demand and inventory data by the Energy Information Administration. The data, which is usually issued on Wednesday, was delayed by the Christmas holiday. Next week's EIA data release will be delayed by the New Year holiday and is scheduled to be issued on Thursday morning.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

• Reporting by Steve Cronin, scronin@opisnet.com; Editing by Jeff Barber, barber@opisnet.com