Oil extends longest run of gains in two years as stocks drain

Bloomberg

Oil rose again to extend the longest run of gains in two years with a industry report showing falling US crude stockpiles the latest sign of tightening global supplies.
While prices continue to surge, some of the biggest moves in the past day have come at the front of the futures curve. Brent’s nearest timespread has surged — a key sign of market tightness — while key swaps tied to the physical North Sea market have also increased amid frenzied trading of derivatives.
Crude’s rise on Wednesday was supported by the American Petroleum Institute reporting inventories fell by 3.5 million barrels last week, according to people familiar with the numbers. If confirmed by official data, it would be an eighth decline in nine weeks.
The structure of oil’s futures curve is offering the biggest yield in about a year, and investors are piling in. Supply cuts by Saudi Arabia and draining stockpiles in regions including China are helping boost confidence that the market has shaken off the worst effects of the coronavirus pandemic. While there are still concerns about near-term demand with many countries still in lockdown, vaccines have helped improve the outlook.
“Oil prices continue to grind higher on the combination of tight supply, a weak dollar and overall positive risk sentiment,” said Jens Pedersen, a senior
analyst at Danske Bank.