Oil prices rally accelerates after drop in US stocks

TOKYO: Oil price rose for a fifth day on Thursday after a surprise fall in US crude inventories rally driven by optimism that vaccines will end the coronavirus pandemic and revive demand for fuels.

Brent futures were up 45 cents, or 0.9%, at $49.06 a barrel after rising around 1.6% in the previous session. West Texas Intermediate crude was up by 34 cents, or 0.7%, at $46.05 a barrel, having gained 1.8% on Wednesday.

Both benchmarks have risen about 9% this week, getting a boost after AstraZeneca said its COVID-19 vaccine could be up to 90% effective, adding to the potential optimism to end the worst pandemic in a century.

Encouraging vaccine results are “pushing aside concerns of enduring containment measures and prompting some follow-through buying from the speculative community,” Citigroup Global Markets said in a note. It warned that “a pullback cannot be ruled out amid less robust demand in the near term.”

US oil stockpiles fell 754,000 barrels last week, data show. The stockpiles at the Cushing, Oklahoma, delivery point for WTI, fell by 1.7 million barrels. Gasoline demand for the week fell by 128,000 barrels per day (bpd) to 8.13 million bpd, the lowest since June.

US President-elect Joe Biden has urged people to forgo big family gatherings, wear protective masks and maintain social distancing for the Thanksgiving holiday in the face of the surging coronavirus pandemic.

Americans are defying pleas from officials to stay home. The United States has recorded 2.3 million new infections in the past two weeks.