Oil Climbs to Three-Month High Amid Mixed Supply-Demand Signals

Futures in New York were little changed. Official U.S. data showed gasoline, diesel and heating oil stockpiles swelled last week.

Kriti Gupta

20 Dec 2019, 05:08 AM IST

Oil Climbs to Three-Month High Amid Mixed Supply-Demand Signals

Flames burn from gas venting pipes on an oil platform. (Photographer: Angel Navarrete/Bloomberg)

(Bloomberg) -- Oil advanced to a fresh three-month high as traders weighed rising U.S. fuel inventories against a rosier demand outlook driven by trade optimism.

Futures in New York rose 0.5%, breaking out of the narrow trading range of the past two sessions. Pushing above the 100-week moving average presented chart-watching technicians with a bullish signal despite a U.S. tally of swelling gasoline, diesel and heating oil stockpiles that reignited demand concerns.

Crude is on track for its best December since 2002 as the Organization of Petroleum Exporting Countries and allied producers deepen output cuts, and the U.S.-China trade dispute moves toward an apparent resolution. American crude exports rose last week to the highest level since October, the Energy Information Administration said.

One measure of oil-market volatility shrank to the lowest since August 2018.

“Oil is still looking overbought on the exuberance of the trade deal, but when you breakdown fundamentals, there’s still a massive amount of supply,” says Scott Bauer, CEO of Prosper Trading Academy. “I’m looking at the build ups that could outweigh the positivity that we’ve seen.”

West Texas Intermediate crude for January delivery, which expires Thursday, rose 29 cents to $61.22 a barrel on the New York Mercantile Exchange. The more-active February contract rose 33 cents to $61.18.

Brent for February settlement rose 37 cents to $66.54 on the London-based ICE Futures Europe Exchange, and traded at a $5.36 premium to WTI for the same month.

Other oil-market news
Gasoline futures rose 1.4% to $1.7068 a gallon. In a matter of weeks, thousands of ships the world over will be forced to use fuel containing less sulfur in order to comply with global rules set out by the International Maritime Organization. See Bloomberg’s preview here. A subsidiary of Vitol Group, the biggest independent oil trader, is demanding that the U.S. government return more than $52 million in fuel taxes the Rotterdam-based company says was improperly collected.

Other oil-market news

Gasoline futures rose 1.4% to $1.7068 a gallon.
In a matter of weeks, thousands of ships the world over will be forced to use fuel containing less sulfur in order to comply with global rules set out by the International Maritime Organization. See Bloomberg’s preview here.
A subsidiary of Vitol Group, the biggest independent oil trader, is demanding that the U.S. government return more than $52 million in fuel taxes the Rotterdam-based company says was improperly collected.

--With assistance from Alex Longley.

To contact the reporter on this story: Kriti Gupta in New York at kgupta129@bloomberg.net

To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Joe Carroll, Mike Jeffers