Oil prices jump to 9-month high after inventory, Bonny Light sheds $0.15

Oil prices rose to a 9-month high on Thursday after government data indicated a drop in United States crude stocks last week, an advancement towards a fiscal stimulus deal in the U.S. and improved Asian demand also supported prices.

The U.S. dollar also hit a two and a half low against major rivals on Thursday. Oil prices generally increase when the dollar falls, given that crude oil priced in the currency becomes cheaper for buyers holding other currencies.

Brent crude futures advanced by 72 cents or 1.4% to $51.80 per barrel at 08:44 West Africa Time while U.S. West Texas Intermediate (WTI) crude futures were up by 71 cents or 1.5% at $48.53. The two benchmarks touched their highest since early March.

Bonny Light, Nigeria’s flagship oil grade, shed 15 cents or 0.30% on Wednesday to close at $50.30 a barrel. But Qua Iboe, another major national oil grade, climbed by $1.15 or 2.23% to $51.77 in early trading on Thursday.

Read also: Oil prices drop on surprise rise in U.S. inventories, Bonny Light gains $1

“All the headlines have been bullish for oil prices,” said Edward Moya, senior market analyst at OANDA in New York.

“U.S. stockpiles posted a larger-than-expected draw, three of India’s refiners are operating almost at 100% capacity, indicating crude demand remains strong, and it seems the U.S. will continue to deliver more monetary and fiscal stimulus, sending the dollar lower and most commodities higher,” he added.

U.S. crude stocks declined by 3.1 million barrels in the week to 11^th December, said the Energy Information Administration, higher than analysts’ forecast of a 1.9 million-barrel fall.

Also strengthening oil prices, U.S. lawmakers came closer to a deal on a $900 billion virus-relief spending stimulus on Wednesday, with top Democrats and Republicans sounding more positive about getting something done.

The U.S. widened its campaign to deliver COVID-19 vaccine shots into the arms of doctors and nurses on the frontlines of an implacable pandemic that has claimed more than 2,500 lives a day in America this week.

“The last full trading week of the year has been very bullish for crude oil prices as energy traders focus more on the light at the end of the COVID tunnel and as Asian demand remains strong,” Moya added.