Oil prices extend gains on lower U.S. fuel inventories

SINGAPORE, Jan 6 (Reuters) – Oil prices rose around 1% on Friday, extending gains from the previous trading session after data showed lower fuel inventories following a winter storm that hit the United States at the year end.

Brent crude futures last gained 79 cents, or 1%, to $79.48 a barrel at 0203 GMT, after settling up 85 cents at $78.69 on Thursday.

U.S. West Texas Intermediate crude futures were also up 80 cents, or 1.1%, at $74.47 a barrel. They had settled 83 cents higher at $73.67 in the previous session.

Data from the U.S. Energy Information Administration (EIA) showed on Thursday that distillate inventories (USOILD=ECI), which include diesel and heating oil, dropped more than expected in the week to Dec. 30. They fell 1.4 million versus expectations of a 396,000-barrel drop.

Meanwhile, U.S. gasoline stocks (USOILG=ECI) fell 346,000 barrels last week, according to the EIA data, compared with analysts’ expectations for a 486,000-barrel drop.

While services activity in China contracted in December for a fourth straight month amid surging COVID infections, the pace of declines slowed while business confidence rose to a 17-month high.

China, the world’s largest crude oil importer, made an abrupt turn in its stringent zero-COVID policy in early December following rare public protests, leading to a surge in infections across the country.

Reporting by Emily Chow; Editing by Stephen Coates

Our Standards: The Thomson Reuters Trust Principles.

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