An overnight crude price rally accelerated midmorning Jan. 12 on the heels of a larger-than-expected drawdown in US inventories.
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At 1545 GMT, NYMEX February WTI was up $1.41 at $82.63/b and ICE March Brent was 97 cents higher at $84.69/b.
US commercial crude oil stocks declined 4.55 million barrels to 413.3 million barrels in the week to Jan. 7, US Energy Information Administration data showed Jan. 12.
The draw exceeded market expectations. American Petroleum Institute data released late Jan. 11 showed a 1.077 million-barrels drawdown in US crude inventories, while analysts surveyed by S&P Global Platts Jan. 10 pointed to a 1.6 million-barrels decline over the period.
NYMEX February RBOB was up 3.11 cents at $2.3885/gal and February ULSD was 3.14 cents higher at $2.5950/gal.
Oil prices were already trading higher ahead of the EIA report after the US Federal Reserve Chair Jerome Powell's Jan. 11 testimony before Congress allayed fears of early rate hikes and assured investors that strong economic growth was intact.
Oil prices rallied to near two-month highs after Powell said Jan. 11 the Fed would raise interest rates as needed to curb inflation while leaving economic growth intact.
US consumer price index data released Jan. 12 showed year-on-year inflation running at 7% in December, the highest level since 1982.
"It seems that even the threat of faster [monetary policy] tightening by the US Fed over the past few days couldn't undermine oil prices," said Jeffrey Halley, OANDA's senior market analyst, Asia-Pacific, in a Jan. 12 note.
During his testimony, Powell added that ensuing quarters could be positive for the US economy after the surge driven by the omicron variant subsides.
"Participants on the oil market drew their own conclusions from this and bought up oil forward contracts in anticipation of continued robust oil demand ... By contrast, fundamental data are taking more of a back seat at present," Commerzbank said in a research note Jan. 12.