Oil prices rose on Wednesday as a more-than-expected decrease in US crude oil inventory relieved investor fears over a fall in demand.
International benchmark Brent crude was trading at $57.30 per barrel at 0626 GMT for a 1.27% increase after closing Tuesday at $56.58 a barrel. This is the highest level since Feb. 24 when it was trading at $57.86.
American benchmark West Texas Intermediate (WTI) was at $53.77 per barrel at the same time for a 1.05% increase after it ended the previous session at $53.21 a barrel.
Late Tuesday, the American Petroleum Institute (API) announced its estimate of a fall of 5.8 million barrels in US crude oil inventories relative to the market expectation of a 2.7 million-barrel draw.
If crude stocks fall in line with the API’s expectations, it would signal a rebound in crude demand in the US, the world's largest oil consumer, to positively support prices.
Further adding to an upward price trend, expectations rose over a higher pandemic relief package following US President-elect Joe Biden’s announcement of his pledge to give “trillions of dollars” after he took office on Jan. 20.
Biden said he would announce a proposal on Thursday to release trillions of dollars for Americans who need more financial relief from the coronavirus pandemic. He said the plan would provide relief for state and local governments struggling with the pandemic, as well as new funding for people who have lost their jobs or are unable to afford rent.
Amid reports about increasing coronavirus cases in Europe with tightening restrictions and the reemergence of the virus in China, investors are keeping tabs on the wider rollout of vaccines.
On Tuesday, the European Medicines Agency received an application for the AstraZeneca vaccine. The European Parliament (EP) said that conditional market authorization is expected at the end of January. The EP also said the largest quantities of vaccines are expected during the second quarter of 2021.
According to data from Johns Hopkins University on Wednesday, the number of cases worldwide has now reached over 91.6 million.
The US still tops the number of cases above 22.8 million, while cases in India now total over 10.4 million, and Brazil follows with over 8.1 million cases.
By Sibel Morrow