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Oil Rises on Declining U.S. Crude Stocks

Oil prices climbed over 1 on Wednesday, after an industry report showed U.S. crude inventories have fallen more than expected, while hopes of an effective COVID19 vaccine continued to bolster sentiment.

Brent crude futures were up 48 cents, or 1.1 to 44.09 a barrel at 0445 GMT, while U.S. West Texas Intermediate WTI crude futures also rose 48 cents, or 1.2, to 41.84 a barrel. Both benchmarks gained nearly 3 on Tuesday.

Crude stockpiles fell by 5.1 million barrels last week to about 482 million barrels, industry group data showed on Tuesday, compared with analysts expectations in a Reuters poll for a reduction of 913,000 barrels. 

Defying analysts expectations again, the American Petroleum Institute API reported on Tuesday a significant draw in crude oil inventories, said Stephen Innes, chief market strategist at AXI.

Oil prices also continue to revel on the back of Pfizers vaccine announcement, Innes said.

Both Brent and U.S. oil prices are up more than 10 this week since initial trials data showed the experimental COVID19 vaccine being developed by Pfizer Inc and Germany39;s BioNTech was 90 effective.

Although oil prices are supported by the positive news on vaccine, overall fuel demand outlook remains clouded amid reimposed coronavirus restrictions in Europe and United States.

Nearterm demand prospects remain weak particularly given a range of European countries implemented COVID19 restrictions albeit to varying degrees which will negatively impact…

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