Oil prices ascend on U.S. inventory draw, Brexit deal hopes

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Oil extended gains on Thursday as a drawdown in U.S. stockpiles of crude and gasoline lifted demand hopes, while investors also cheered a potential Brexit trade deal.

U.S. West Texas Intermediate (WTI) crude futures rose 18 cents, or 0.4%, to $48.30 a barrel by 0124 GMT, while Brent crude futures climbed 20 cents, or 0.4%, to $51.40.

Both contracts gained more than 2% on Wednesday.

“Oil markets are quiet as all investors are in a holiday mode,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

“Lower U.S. inventories of crude and fuels as well as signs of a potential Brexit deal which led to weaker U.S. dollar were good news, but lingering worries over a new variant of the novel coronavirus capped gains,” he said.

U.S. crude inventories fell by 562,000 barrels in the week to Dec. 18 to 499.5 million barrels, the Energy Information Administration said on Wednesday.

Gasoline stocks fell by a surprise 1.1 million barrels to 237.8 million barrels, the EIA said, while distillate stockpiles fell by a more-than-expected 2.3 million barrels to 148.9 million barrels.

Oil prices also drew support from news than Britain and the European Union were on the cusp of striking a narrow trade deal on Thursday, swerving away from a chaotic finale to the Brexit split.