Crude oil prices rose on Thursday as vaccine rollouts bolstered the economic outlook and U.S. fuel stocks fell sharply, although gains were capped by a surge in crude oil inventories after last month’s Texas storm.
Brent crude futures for May rose 20 cents, or 0.3%, to $68.10 a barrel by 0752 GMT.
U.S. West Texas Intermediate crude for April was up 21 cents, or 0.3%, at $64.65.
Effect of U.S Economy on Oil Prices
U.S. gasoline stocks fell by 11.9 million barrels in the week to March 5 to 231.6 million barrels, the Energy Information Administration (EIA) said, compared with expectations for a 3.5 million-barrel drop.
As a result of the drop in gasoline stocks, demand for the end products increased resulting in an economic recovery.
“Given the powerful signals from the U.S. re-opening narrative, it still suggests that the path of least resistance for oil prices is higher.” said Stephen Innes, Chief Global Markets Strategist at Axi.
Crude inventories, rose by 13.8 million barrels in the week to March 5 to 498.4 million barrels, compared to analysts’ expectations for an 816,000-barrel rise, as the nation’s oil industry continued to feel the effects of a winter storm mid-February that stalled refining and forced production shut-ins in Texas.
US consumer prices, which measures changes in the price of goods and services from a consumer’s perspective, increased 0.4% in February in line with market expectations. This reflected a more positive outlook for market and oil prices.
On an annual basis, the Consumer Price Index was up 1.7% in February from the same month in 2020, again in line with market consensus.
The approval of the $1.9 trillion economic support package by the US House of Representatives also supported a more buoyant market recovery.
The House of Representatives voted along near-party lines on Wednesday to approve US President Joe Biden’s $1.9 trillion coronavirus relief bill, which will see most Americans receiving $1,400 in direct payments, an expansion of the child tax credit up to $3,600, and a boost in funds for state and local governments reeling from the pandemic.
On Wednesday, Saudi Arabia’s foreign minister said the kingdom would take deterrent action to protect its oil facilities following attacks by Yemen’s Iran-aligned Houthi movement on energy sites.