LONDON — Oil prices rose on Thursday, extending a rally caused by a larger-than-expected drop in US energy stockpiles, traders said.
New York’s main futures contract, light sweet crude for delivery in February, rose 37 cents to 77.04 dollars a barrel.
Brent North Sea crude for February delivery gained 25 cents to 75.70 dollars.
The Christmas Eve market surge was largely driven by a fall in energy inventories in the United States — the world’s biggest consumer — that had been far larger than expected, analysts said.
Data released by the US Department of Energy on Wednesday showed stockpiles of crude dropping by 4.9 million barrels to 327.5 million in the week ending December 18, far above analyst expectations of a 1.1 million-barrel drawback.
Distillate inventories also slid 3.1 million barrels last week, against analyst forecasts of a 1.6 million barrel fall.
Data for distillates, which include heating oil, is in focus as winter starts to bite in the United States and Europe.
Analysts cautioned however that despite the fall in stockpiles, inventory levels were still high.
“Crude oil stocks are still lingering near the upper end of the five-year range, thus creating doubt in our mind as to the underlying strength of the recent price rally,” MF Global analyst Tom Pawlicki said.
Oil prices have meanwhile risen for much of the week as traders bet on improving demand after OPEC decided against changing the cartel’s official crude output levels.
The Organization of Petroleum Exporting Countries, as expected, held its crude output quotas unchanged at its meeting in Angola Tuesday, warning of lingering weakness in the world economy.
Tuesday’s meeting capped a year of recovery for oil prices, which have more than doubled since the cartel set strict quota cuts in the depths of the economic crisis a year ago.
In January the cartel enforced total OPEC cuts of 4.2 million barrels a day, which helped prices recover from around 32 dollars one year ago.
Meanwhile last week, OPEC slightly upgraded its forecast for world oil demand growth next year but said usage in advanced economies would contract again.
Several of the cartel’s members have said the current price of oil is comfortable for them.