Investing.com – Oil prices settled up on Friday after the U.S. government reported a much bigger fall in crude inventories than anticipated. But analysts said the market was probably ripe for a correction after gaining nearly 14% since the end of October.
West Texas Intermediate futures, the benchmark for U.S. crude, settled up four cents at $61.72 per barrel. It earlier hit a 3-1/2 month high of $61.97.
London-traded Brent, the global crude benchmark, closed the regular New York session up 24 cents at $68.16. It earlier rose to a mid-September high of $68.31.
Both WTI and Brent have risen about without pause for four weeks now, their longest streak of gains since April. Aside from a cumulative gain of almost 14% over the past two months, WTI is up almost 36% for 2019, while Brent has gained about 26%.
"While there have been some sporadic data attesting to some bullish fundamentals here and there, oil prices seem to be getting ahead of themselves and appear ripe for a correction in the New Year -- unless there's roaring demand to keep the market chugging along," Barani Krishnan, senior commodities analyst at Investing.com, said.
Friday's bounce in oil came after the EIA announced that U.S. crude inventories fell by 5.474 million barrels for the week ended Dec. 20. The market was expecting a drop of about 1.7 million barrels, according to forecasts compiled by Investing.com. The numbers were delayed until Friday due to the Christmas holidays.
While the drawdown announced by the EIA was larger than unexpected, Friday's market gains were muted, "because the market has gone up so much over the past two weeks, riding the wave of the China deal talk and other demand prospects," Krishnan said.
Gasoline inventories rose by 1.96 million barrels, compared with expectations for a rise of about 1.66 million barrels. Distillate inventories fell by 152,000 barrels, versus forecasts for a build of 800,000 barrels.
Crude imports came in higher at 6.8 million barrels per day, and refinery runs remained high, above 93%.
“On the bearish side, crude production returned to the record high levels of 12.9 million barrels per day, though the increase on the week is just about 100,000 bpd,” Krishnan noted. “And exports fell by 236,000 bpd to around 3.4 million.”