Oil prices remain on the rise despite the biggest increase in gasoline in 21 months By Investing.com

© Reuters.

By Barani Krishnan

Investing.com – Oil prices rose for a third day in a row on Wednesday as promising monthly U.S. employment data, due later in the week, offset the unexpected build-up of fuel inventories that reportedly generally brought down the market.

The US Department of Labor is due to release a report for the public and private sectors on Friday, with expectations for job growth of 424,000 compared to a gain of 210,000 in November. Ahead of those numbers, payroll investigator ADP reported on Wednesday that jobs in the private sector itself grew almost twice as expected last month, reaching 807,000.

“There is a strong correlation between the monthly number of jobs in the United States and the consumption of oil and I think this is what keeps the oil market on the rise today, despite the huge inventories of unexpected products. last week, “said John Kilduff, founding partner of Again Capital, an energy hedge fund in New York City.

fell 2.114 million barrels last week, the Energy Information Administration, or EIA, said on Wednesday. Analysts tracked by Investing.com rather expected a drawdown of 3.283 million barrels.

, meanwhile, jumped 10.128 million barrels last week, the EIA said, compared to expectations of a 1.775 million barrels hike. The historic EIA has shown this to be the largest weekly increase in gasoline inventories since April 2020, at the height of the coronavirus crisis.

also inflated more than expected, with a tally of 4.418 million barrels last week against a forecast of 1.525 million barrels.

Kilduff said the first week of January showed seasonally larger-than-expected reductions in crude inventories and a higher than expected increase in product inventories as those with barrels of crude in their hold cleared them. to avoid tax obligations for the previous year.

“But a build of 10 million barrels of gasoline is huge, to say the least,” he added. “We will have to see if there is enough consumption in the coming weeks to lead to draws. Otherwise, oil and gasoline prices may have to give back some of it, as OPEC + announced a production increase for February. “

OPEC + – which brings together the 13 members of the Saudi Arabia-led Organization of the Petroleum Exporting Countries along with 10 other Russian-led oil producers – gave the green light at a meeting on Tuesday to an increase of production of 400,000 barrels per day for the next month, similar to what it had done. done every month since August.

At 11:46 a.m. ET (4:46 p.m. GMT), the benchmark for U.S. crude was up $ 1.26, or 1.6%, to $ 78.25 a barrel, after hitting an intraday high of 78 , $ 49. WT is up 4% year-to-date.

The London market, the world’s benchmark for oil, posted a gain of $ 1.18, or 1.5%, to $ 81.18 per barrel. Brent is up 4.4% for the year.

(Additional report by Sam Boughedda)

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