Oil continues gains on inventory draw

NEW YORK, Dec. 24 (UPI) -- Crude oil prices extended their gains for the week Thursday on signs inventory held in storage in the United States was dwindling.

Though still close to lows not seen in a decade, crude oil prices are ending the week on a strong note. Brent crude oil gained 0.7 percent early in the holiday-shortened session for Thursday to start the day at $37.65 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, held its rare premium to Brent to gain 0.9 percent to $37.86 per barrel.

WTI moved above Brent as preliminary data from the American Petroleum Institute showed crude oil inventories declined. The U.S. Energy Information Administration's more formal data set showed oil inventories, not counting what's stored in the Strategic Petroleum Reserve, declined by 5.9 million barrels from the previous week.

U.S. economic growth and seasonal demand may be accounting for some of the decline. The U.S. Commerce Department this week reported personal income growth of 0.3 percent for November and a steady pace of gains in gross domestic product above 2 percent.

Globally, the market is facing an increase in crude oil supplies as more Iranian crude oil, and now U.S. crude oil, may be available starting next year. Enterprise Products Partners, a midstream company based in Houston, said it's preparing for what it believes will be the first exports of U.S. crude oil since the 1970s starting in January.

Markets are still oversupplied. EIA data show that, at 484.8 million barrels, U.S. crude oil inventories are still near their highest levels in 80 years.

Crude oil prices may in part be supported by national security concerns. The U.S. Embassy in Beijing issued an alert Thursday warning of the potential for violence targeting Westerners in the region on or around Christmas Day.

WTI is up 9.7 percent since Monday, but still below the $42 per barrel start of December. Brent is off 15 percent for the month.