Oil futures were slightly higher Thursday, on track to end a holiday-shortened week with gains after the U.S. benchmark finished the previous session at a nearly one-month high.
Encouraging data regarding the effectiveness of COVID-19 vaccine boosters against the omicron variant of the coronavirus were helping to underpin oil, analysts said, as well as studies indicating the strain was relatively less severe than the delta variant, though more infectious.
West Texas Intermediate crude CL00, +0.52% CLG22, +0.52% for February delivery rose 46 cents, or 0.6%, to $ 73.22 a barrel on the New York Mercantile Exchange, after posting the highest close Wednesday since Nov. 24. February Brent crude BRN00, +0.43% BRNG22, +0.45%, the global benchmark, was up 39 cents, or 0.5%, at $ 75.67 a barrel on ICE Futures Europe.
Crude found support the previous session after a larger-than-expected drawdown in U.S. crude inventories.
“Oil stockpiles fell by 4.7 million barrels, although the drop could be mainly because companies are discouraged from storing oil barrels owing to year-end tax considerations,” said Naeem Aslam, chief market analyst at Ava Trade, in a note.
“The recent developments of crude oil inventories and production falling provide a rosy outlook for oil prices as supply seems to be lagging demand despite omicron-related restrictions being enforced across the globe,” he said.
A University of Oxford study found a third dose of AstraZeneca’s AZN, +2.00% vaccine was effective against the omicron variant. Also, Novavax NVAX, -4.07% said early data showed its COVID-19 vaccine produces an immune response. On Wednesday, the Food and Drug Administration authorized Pfizer Inc.’s PFE, +1.02% COVID-19 antiviral pill, adding to the arsenal that can be used to fight the disease.
Natural-gas futures NGF22, -4.48% fell 4.2% to $ 3.808 per million British thermal units on Nymex, leaving the U.S. contract on track for a 3.2% weekly gain. European natural-gas futures tumbled, with the price on the TTF platform in the Netherlands down nearly 17% after surging earlier this week as gas flows from Russia to Europe reversed back to the east.
Tight supplies and a sharp drop in Russian flows amid rising tensions between Moscow and Ukraine have sent European natural-gas prices soaring, with Dutch futures still up more than 56% in December.
Read: Russia-Ukraine tensions mean Europe’s natural-gas volatility unlikely to fade
Thursday’s retreat came as the weather forecast for Europe was adjusted, showing no cold spell in the near term, said Aidana Childebayeva, a Budapest-based commodity analyst at Schneider Electric, in a note.
Additional weakness was attributed to a healthy schedule of liquefied natural gas, or LNG, imports, the analysts said, with multiple cargoes redirected from Asia to Europe due to favorable prices, the analyst said.
The Energy Information Administration on Thursday will release weekly U.S. natural-gas storage data. Analysts surveyed by S&P Global Platts, on average, are looking for a withdrawal of 57 billion cubic feet.
January gasoline futures RBF22, +0.96% rose 1.1% to $ 2.192 a gallon, while February heating oil HOG22, +0.45% was up 0.5% at $ 2.3114 a gallon.