LONDON — Oil prices climbed for a fourth straight day to hit their highest in two and a half weeks on Thursday with U.S. crude, heating oil and jet fuel stocks growing tighter just as a wintry blast hits the United States.
Brent crude futures were 32 cents, or 0.4%, higher at $82.52 by 1446 GMT, extending gains of around 2.7% from the previous session but losing some steam from earlier in the session.
U.S. West Texas Intermediate (WTI) crude futures were up 33 cents, or 0.4%, at $78.62 a barrel.
Both benchmark contracts jumped on Wednesday after government data showed U.S. crude inventories fell by much more than analysts had expected, posting a drop of 5.89 million barrels for the week ending on Dec. 16.
Distillate stocks, which include heating oil and jet fuel, also declined, going against expectations for a build, in what PVM analyst Stephen Brennock called “an overwhelmingly price-supportive stock report from the EIA.”
The falling stockpiles come as demand for heating oil is set to soar with a powerful winter storm hitting the United States, with sub-zero wind chills expected as far south as Texas and record-breaking lows forecast for Florida.
At the same time, airlines canceled nearly 2,000 U.S. flights scheduled for Thursday and Friday, disrupting holiday travel for thousands and sending a bearish signal for travel fuel demand.
Also keeping a lid on prices are demand worries stemming from China’s COVID-19 surge and fears of a global recession.
China may be struggling to keep an accurate count of COVID infections as it experiences a big spike in cases, a senior World Health Organization official said on Wednesday, amid concerns about a lack of data from the country.
A Shanghai hospital has told its staff to prepare for a “tragic battle” with COVID-19 as it expects half of the city’s 25 million people will get infected by the end of next week, as the virus sweeps through China largely unchecked. (Additional reporting by Sonali Paul in Melbourne and Mohi Narayan in New Delhi; editing by Jason Neely, Kirsten Donovan)