UPDATE 5-Oil prices rise, touch 9-month high on U.S. stimulus progress

  • Reuters
  • Commodities News
UPDATE 5-Oil prices rise, touch 9-month high on U.S. stimulus progress
Credit: © Reuters.

* Washington moves toward more pandemic relief spending

* U.S. crude stockpiles fall, fuel inventories up -EIA

* U.S. vaccine campaign grows (New throughout, updates prices, market activity and comments; new byline, changes dateline, previous LONDON/SINGAPORE)

By Jessica Resnick-Ault

NEW YORK, Dec 17 (Reuters) - Oil climbed on Thursday and touched a nine-month high, with traders optimistic about progress toward a U.S. fiscal stimulus deal and strong Asian demand.

Record-breaking refining demand in China and India lent further strength to the market.

U.S. lawmakers edged closer to agreement on a $900 billion virus-relief spending package on Wednesday. U.S. dollar set a 2-1/2 year low against major rivals on Thursday which also helped oil because crude priced in the greenback becomes cheaper for buyers holding other currencies.

Brent crude LCOc1 futures were up 34 cents at $51.42 a barrel by 12:38 p.m. EST (1638 GMT), and touched a session high of $51.90.

U.S. West Texas Intermediate (WTI) crude CLc1 futures rose by 45 cents to $48.27 a barrel, with a session high of $48.59. Both benchmarks hit their highest since early March.

"Asia was ahead of the curve in recovery mode from the Coronavirus," said Phil Flynn, senior analyst at Price Futures in Chicago. "Looking at what we're seeing in Asia is raising expectations that in the New Year we will see a rapid increase in crude oil demand, as the vaccine rolls out in the U.S.," he said.

The United States on Thursday expanded its campaign to deliver COVID-19 vaccine shots. crude inventories fell by 3.1 million barrels in the week to Dec. 11, the Energy Information Administration said, far more than analysts' expectations of a 1.9-million-barrel drop. EIA/S

"It seems to be a much better festive season than most bullish traders could expect for. But whether oil prices can remain as high and keep these gains is still questionable amid the demand destruction lockdowns are causing," said Bjornar Tonhaugen at Rystad Energy.

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