Oil Extends Gains On Stockpile Draw

Oil has risen again in Asia trade on Wednesday, extending its gains this week. WTI last up $0.29 at 48.28, while Brent is up $0.25 at 51.34.

• Oil is supported by stockpile data showing inventories fell for the third consecutive week. API data showed headline crude stocks fell 4.79m bbls, which if matched by official data later this week would be the biggest decline in 3 months.
• Upside in oil is tempered by global coronavirus concerns. The Covid-19 strain discovered in the U.K. has been found in the U.S., a second cluster of infections is emerging in Sydney and the UK looks set to tighten containment measures.
• Optimism re: approval of the U.S. House for increasing stimulus checks was moderated by Senate Majority Leader McConnell's objection to a motion to pass the bill unanimously. It now seems unlikely the Senate will have chance to consider the deal before Congress adjourns Sunday. Attention will now turn to Senate elections in Georgia on Jan. 5.
• The OPEC+ group looks likely to increase output by 500k bpd from January, while Russia's deputy prime minister said last week Russia would be supportive of additional gradual increases in February. The OPEC+ group will meet next week to make a decision on February output levels.
• Government officials from Saudi Arabia and Russian reiterated commitment to OPEC+ agreement to support oil market stability at a Saudi-Russian Joint Governmental Committee for Commercial, Economic, Scientific and Technical Cooperation.