Oil Mixed On Unexpected Inventory Rise, As Impact Of Biden Presidency Is Considered

Meanwhile, India is hoping for more Iranian, Venezuelan oil imports: File Image/Pixabay

An unexpected build in U.S. crude stockpiles resulted in mixed trading on Thursday, but the prospect of further economic stimulus from the White House to combat the negative effects of the Covid inspired lockdowns continued to buoy analytical sentiment.

Although the official figures won't be released until Friday, industry data showed a rise in U.S. crude  inventories of 2.6 million barrels last week, compared with forecasts for a 1.2 million barrel draw.

Phil Flynn, senior market analyst at Price Futures Group Inc., said, "We are on pause until we get the inventory report: the market is waiting to see what we're going to see in inventories tomorrow and stimulus down the road."

West Texas Intermediate on Thursday fell a modest 18 cents to settle at $53.13 per barrel, but Brent  rose 2 cents to settle at $56.10 per barrel.

Meanwhile, although oil price gains this week were due to optimism that U.S. president Joe Biden would soon enact the $19-trillion Covid support package to bolster the economy, it seemed his administration in the long term would be bearish for the oil industry.

Biden's first actions as president included a return to the Paris climate accord, revoking a permit for the Keystone XL oil pipeline project from Canada, and a commitment to end new oil and gas leasing on federal lands.

But Suhail al-Mazrouei, energy minister for the United Arab Emirates, thought the U.S. will always play an important role in global energy markets: he told media, "The United States of America is a major player now…with its production, with the fact that this industry that has been developed through shale oil and gas has created lots of jobs and created an economy by itself," and he added that a new president wouldn't change that status.

If nothing else, Biden will likely facilitate the flow of oil from other nations to other nations: Dharmendra Pradhan, oil minister for India, said on Thursday that his country is hoping Biden's conciliatory approach to relations with Iran and Venezuela will result in more oil imports from these countries.

India halted imports from Iran in mid-2019 after the expiration of U.S. exemptions from sanctions, and it purchased 7.65 million tons of Venezuelan crude from January to October last year, compared with 15.9 million tons in 2019.