- WTI rallies to fresh eight-month highs near $45.50.
- Expectations for vaccine-led global economy recovery power gains.
- The API reports a large buildup of inventories in the weeke ended Nov. 20.
Oil has climbed to fresh multi-month highs, extending Tuesday’s price gains as optimism emanating from potential coronavirus vaccines overshadows inventory build-up in the US.
West Texas Intermediate (WTI), the North American oil benchmark, is currently trading at $45.50 per barrel, representing over 1% gains and the highest level since March 6.
Large crude build
On Tuesday, the American Petroleum Institute (API) reported crude oil inventories of 3.8 million barrels for the week ending Nov. 20, beating analysts’ forecast of an inventory build of just 127,000 barrels.
So far, however, the large inventory, a sign of weak demand, has failed to put brakes on oil’s rally. The black gold has risen from roughly $34 to levels above $45 this month. Prices jumped over 4% on Tuesday to register its biggest single-day gain since Nov. 9.
Hopes for a swift vaccine-led global economic recovery in 2021 seem to be powering gains in oil. Drugmakers Pfizer and Moderna announced encouraging results of their respective experimental vaccines earlier this month, boosting demand for risk assets.
Technical levels
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