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Oil records a 3-month peak due to lower inventory and investor optimism

UNITED STATES (OBSERVATORY NEWS) — Oil prices rose to gain for the fourth straight week on Friday, sticking to three-month highs after new data showed US crude inventories fell much more than expected, while a stock market rally near the end of the year was backed by strong economic figures Optimism about the trade agreement between the United States and China.

Brent crude rose 24 cents to set the settlement price at 68.16 dollars a barrel, its highest level since mid-September. Global benchmark crude has climbed around 27 percent since the end of 2018.

WTI rose four cents to close at $ 61.72 a barrel, a three-year peak as well. The US benchmark is up 36 percent this year.

US crude inventories fell 5.5 million barrels over the week ending December 20 to 441.4 million barrels, the Energy Information Administration said. The decline far exceeded analyst expectations, which was a drop of 1.7 million barrels.

“Stocks are paying to bet on higher prices,” said Josh Graves, chief market analyst at RJ or Futures in Chicago, adding that a jump in stock prices near the end of the year also helped raise oil prices as consumers ’confidence improved this month.

“It is a move driven by Santa Claus. People are buying more which indirectly drives oil prices up.”

US stock indices rose slightly on Friday, with Standard & Poor’s 500 approaching its best annual performance since 1997. Nasdaq crossed the nine-point level for the first time on Thursday.

Baker Hughes Energy Services said in an important report on Friday that the American energy companies stopped the work of eight oil rigs, in the first reduction in the number of rigs operating within three weeks, as the producers went ahead with their plans to cut spending.

Trading volumes were meager. But new data showed that Chinese industrial profits rose to an eight-month high in November, improving sentiment in the oil market.

In the United States, a survey on Thursday showed a record holiday season purchases that exceeded analyst expectations, lifting US stocks to new levels.

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