Oil futures: Crude consolidates gains, Brent nears $83/b
Quantum Commodity Intelligence - Crude oil futures firmed Wednesday, consolidating the previous day's steep gains as traders shrugged off the US announcement of a release of 50 million barrels from its strategic reserves.
Front-month January ICE Brent futures were trading at $82.70/barrel (1630 GMT), up 0.7% on Tuesday's settle of $82.31/b, following mildly bullish US statistics that confirmed a US stock draw in gasoline and a slight build in crude.
At the same time, January NYMEX WTI was trading at $78.84/b, versus Tuesday's settle of $78.50/b.
The US SPR announcement was at the low end of expectations while contributions from other countries were viewed as disappointing from a US perspective, including Japan releasing just 4.2 million barrels from national stockpiles by the end of the year.
"The aggregate size of the release of 70-80 million barrels was both smaller than the 100+ million barrels the market had been pricing in, with the swap nature of most of these barrels implying an even smaller net increase in oil supplies," said Goldman Sachs in a market update.
Meanwhile, the move to release government stockpiles could see the OPEC+ group put the brakes on further output hikes, particularly with the market expected to move into a surplus in Q1 and uncertainty over the latest Covid-19 wave in Europe.
The WSJ reported Wednesday that the producer powerhouses of Russia and Saudi Arabia were mulling whether to pause the introduction of more crude oil barrels at next month's OPEC+ meeting, although there are splits in the producer group.
The rise in futures came after the announcement by the EIA that commercial crude and product stocks fell 7.6 million barrels over the week, with crude rising just 1 million barrels, far lower than expected, and gasoline falling by 600,000 barrels versus expectations of an increase.
The dollar index rose to its highest level since July 2020 after the US published buoyant economic data, limiting Wednesday's further upside potential for crude oil futures.
US weekly jobless claims fell below pre-pandemic levels to 199,000, while its Q3 preliminary GDP estimate came in above expectations.