Oil prices edged up over 1% in energy commodities on Wednesday. An industry report showed U.S. crude inventories have fallen more than expected. Hopes of an effective coronavirus vaccine continued to bolster sentiment.
At 0445 GMT, Brent crude futures gained 48 cents, or 1.1%, to $44.09 a barrel. U.S. West Texas Intermediate (WTI) crude futures also edged up 48 cents, or 1.2%, to $41.84 a barrel. Both benchmarks were up nearly 3% on Tuesday.
Crude stockpiles dropped by 5.1 million barrels last week to about 482 million barrels. This is compared with analysts’ expectations for a reduction of 913,000 barrels.
Defying analysts’ hopes again, the American Petroleum Institute (API) reported on Tuesday a significant draw in crude oil inventories. This was a statement from Stephen Innes, a chief market strategist at AXI.
Innes added that oil prices also continue to revel on the back of Pfizer’s vaccine announcement.
Both Brent and U.S. oil prices are up more than 10% this week. Data on initial trials showed the experimental COVID-19 vaccine being developed by Pfizer Inc and Germany’s BioNTech was 90% effective.
The positive news on a vaccine supports oil prices. But overall fuel demand outlook remains clouded amid re-imposed pandemic restrictions in Europe and the United States.
Renewed restrictions in the eurozone and the U.S to combat COVID-19 have slowed the pace of fuel demand recovery. The move counteracts a rebound in Asian economies where consumption has almost returned to pre-COVID levels.
Gold Rises on U.S. Stimulus Hopes and Virus Fears
Gold was up on Wednesday morning in Asia’s precious metals, reducing losses from the previous session. Stimulus hopes weakened the dollar and increasing COVID-19 cases also helped the market up.
By 12:09 AM ET (4:09 AM GMT), gold futures were up 0.03% at $1,877. As COVID-19 surges in the U.S., hopes of a substantial stimulus package have boosted gold prices.
The Fed chiefs have said that government assistance is needed to move the economy through this period. Notably, financial stimulus programs tend to devalue the dollar and support the precious metal.
The latest job openings data indicate a U.S. slowdown. U.S. JOLTs Job Openings are coming in at 6.436 million, under the forecast 6.5 million.
Some U.S. states, including California, are imposing stronger pandemic measures in response to the rapidly rising number of cases. Currently, the U.S. has recorded a total of 10.2 million cases, one-fifth of the global total. It records over 110,000 new cases a day, according to Johns Hopkins University data.