By Barani Krishnan
Investing.com - Crude prices rose Tuesday, extending gains from the previous session, as traders awaited the final scheduled release of U.S. oil inventory data for the year that could help decide the direction in a market affected by seasonally thin volume.
West Texas Intermediate, the benchmark for U.S. crude, settled up 41 cents, or 0.5%, at $75.98 per barrel, after rising 2.4% Monday on optimism about travel in 2022 and the positive impact that could have on gasoline, diesel and jet fuel use, despite the concerns governments across the world have about emerging Covid variants.
London-traded Brent, the global benchmark for oil, finished the session up 34 cents, or 0.4%, at $78.94. Brent rose 3.2% on Monday.
“Markets are stronger … with the continuation chart for Crude now at the 200d MA,” Scott Shelton, ICAP’s energy futures broker in Durham, North Carolina, said, referring to WTI’s 200-day moving average.
“Indications are that CTAs have been buying for most of yesterday and today as they are flipping from short to long,” Shelton added.
CTAs, or Commodity Trading Advisors, a term commonly used for hedge funds, have seen volatile returns lately as oil prices attempt to find stable ground after falling from seven-year highs in mid-October to four-month lows earlier this month.
Despite recent volatility caused by the Omicron variant, WTI remains up 57% for the year, while Brent shows an annual gain of 52%.
Tuesday’s gains in oil came ahead of a snapshot of a weekly snapshot on U.S. crude, gasoline and distillate stockpiles due from the American Petroleum Institute.
The API numbers, released each Tuesday after market settlement at 4:30 PM ET (21:30 GMT), are a precursor to official weekly inventory data due each Wednesday from the EIA, or U.S. Energy Information Administration. This week’s release will be the last for the year, although the final reading for 2021 itself — for the week ended Dec 31 — will be published next week.
Analysts tracked by Investing.com have forecast that U.S. crude inventories fell by 3.2 million barrels for the week ended Dec. 24, adding to the previous week’s decline of 4.7 million.
Gasoline inventories likely rose by a marginal 31,000 barrels, versus the increase of 5.5 million in the previous week, forecasts showed.
Stockpiles of distillates, which include diesel and heating oil, are expected to have grown by 59,000 barrels, after the previous week’s gain of 396,000.