# U.S. oil books over 2% gain as weekly crude stockpiles seen falling; Brexit deal nears

A report from the less closely followed American Petroleum Institute late Tuesday showed that U.S. crude supplies rose by 2.7 million barrels for the week, according to sources. It isn’t unusual for the API data and EIA weekly reports to be out of sync but investors tend to be more attuned to the government’s EIA report.

The EIA data also showed crude stocks at the Cushing, Okla., storage hub edged down by 26,000 barrels for the week. Gasoline supply, meanwhile, declined by 1.125 million barrels, while distillate stockpiles fell by 2.325 million barrels. S&P Global Platts had forecast a supply increase of 1.4 million barrels for gasoline and a drawdown of 1.1 million barrels in distillates.

In geopolitics, a report from The Sun newspaper indicated that a Brexit deal is “in sight” and could be struck as soon as Wednesday or Christmas Eve, helping to foster more hope of avoiding a hard Brexit, where Britain crashes out of the EU trade bloc without a trade pact in hand.

“The odds that the Brexit deal may be done as well as the possibility that the COVID relief bill may get more cash into the hands of consumers is giving us a lift,” Phil Flynn, senior market analyst at Price Futures Group told MarketWatch.

President Donald Trump on Tuesday criticized the roughly $900 billion coronavirus relief deal passed by Congress, and called on lawmakers to increase direct payments to Americans to $2,000 from $600.

Oil is recovering from a weekly slide induced by concerns that a fast-spreading variant of the coronavirus would lead to tighter global lockdowns, hobbling energy demand.

Investors, however, have taken some solace in signs of loosening restrictions against travel originating from the U.K., where reports of the COVID mutation have been associated with a surge in infections.

France reopened its border with the U.K. following a ban aimed at preventing the new strain from entering Europe. Drivers will now be allowed to enter France by tunnel or ferry on the condition that they provide a negative test for the virus.

“The resumption of both transport and people between the two countries is a positive development, but the requirement for a Covid test will impede movement nonetheless,” wrote Rystad Energy oil markets analyst Louise Dickson, in a daily note.

West Texas Intermediate crude for February delivery
CLG21,
+2.00%

CL.1,
+2.00%
closed up $1.10, or 2.3%, at $48.12 a barrel, after a 2% drop on Tuesday.

February Brent crude
BRNG21,
-0.31%

BRNG21,
-0.31%
added $1.12, or 2.2%, to settle at $51.20 a barrel on ICE Futures Europe, following a 1.6% slide in the previous session.

For the week, WTI is on pace for a weekly slump of 2.5%, while Brent is on track for a weekly decline of 2.1%, FactSet data show, based on the most-active contracts.

Perhaps providing some modest support for crude, Reuters reported supply disruptions in Nigeria, with Exxon Mobil Corp.
XOM,
+1.73%
issuing a force majeure on the Qua Iboe crude oil export terminal, though that facility could resume operation by early January.

Back on Nymex, January
RBF21,
+2.85%
gasoline added 4.25 cents, or 3.2%, to $1.3820 a gallon, while January heating oil
HOF21,
+2.13%
picked up 3.59 cents, or 2.5%, to end at $1.4975 a gallon.

Natural gas for January delivery
NGF21,
-5.83%
traded at $2.608 per million British thermal units, down 17.20 cents or 6.2%, marking its largest one-day percentage slide since Dec. 7, according to Dow Jones Market Data.