Oil continued its upward momentum for the third consecutive week and rose to its highest level in six months. Brent crude advanced to $66.14 per barrel and WTI reached $60.44 per barrel.
According to Baker Hughes data, the US oil rig count saw an increase of 18 rigs, the first double-digit growth since the beginning of April. However the current oil and gas rig tally of 813 is still 267 down from this time last year.
The crude oil market is heading toward 2020 on the front foot as trade talks continue on a positive trajectory and with manufacturing data pointing to steady US economic growth.
The upbeat mood encouraged money managers to increase their net long positions in Brent crude oil futures and options by 24,517 contracts to 398,360 in the week ending Dec. 17. Net long contracts in WTI crude oil futures and options also rose by 43,793 contracts to 272,218 over the same period.
The International Energy Agency (IEA) reported the latest OECD commercial stocks drew 32.5 million barrels to 2.9 million barrels below the five-year average and covered 60.6 days, one day below the average. This means that OECD commercial inventories have been falling fast in recent months by almost 100 million barrels.
The strong market fundamentals and positive sentiment have helped the oil price move up steadily since September with less volatility than previous months. This shows that investors are buying into the OPEC+ output strategy even if the rise in oil prices has been more about positive develop- ments in the wider market,
As US-China trade tensions ease, the global economic outlook is expected to improve, underpinning energy demand. Even as the trade war rumbled on in 2019, the growth in China crude oil imports was undiminished, hotting a re- cord 11.18 million bpd in November and surpassing the US record mark of 10.77 million bpd set in 2005.
