(Bloomberg) — Oil was steady near the highest settlement in four weeks after U.S. crude stockpiles declined more than expected.
Futures in New York traded near $73 a barrel after rising 2.3% on Wednesday. U.S. crude inventories dropped by 4.72 million barrels last week, according to government data, almost twice the median estimate in a Bloomberg survey. Trading volumes have thinned moving into the holiday period, leaving the market susceptible to greater volatility and wild price swings.
South Korea, meanwhile, will start releasing crude and oil products from its strategic reserves next month, the first major consumer to follow through with a pledge to tap emergency stockpiles as part of a U.S.-led initiative.
Oil is heading for a yearly gain following a strong rebound from the pandemic but there are bearish headwinds mounting for the market including the omicron variant of the virus. However, an energy crunch in Europe and disruptions to supply in Libya and Nigeria have led to some tightening.
“It’s been a pretty choppy ride and seasonality plays into that,” said Stephen Innes, global managing partner at SPI Asset Management. “The U.S. inventory data and news around Europe’s energy shortage helped momentum.”
U.S. gasoline stockpiles rose by 5.53 million barrels last week, according to the Energy Information Administration. Crude stockpiles at the key storage hub of Cushing expanded by 1.46 million barrels, climbing for a sixth week.
Jet fuel consumption in the U.S. is showing the first signs of sustained growth since the pandemic, meanwhile. The implied jet yield at U.S. refineries, or the percentage of crude oil turned into jet fuel, has risen consistently since mid-November and is holding at 9% or higher.
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