Oil hits three month high on falling oil stocks

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Houston

Oil prices rose to the fourth consecutive weekly gain steadying at three-month highs after new data showed U.S. crude inventories fell far more than expected, while upbeat economic data and optimism over a U.S.-China trade deal fueled a year-end stock market rally. Brent crude LCOc1 rose 24 cents to settle at $68.16 a barrel, the highest since mid-September. The international benchmark has climbed nearly 27% since the end of 2018. West Texas Intermediate CLc1 rose 4 cents to settle at $61.72 a barrel, another three-month high. The U.S. benchmark has risen 36% so far this year. U.S. crude stocks fell by 5.5 million barrels in the week to Dec. 20 to 441.4 million barrels, according to the Energy Information Administration, far exceeding analysts’ expectations of a 1.7 million-barrel drop. “Inventories are bullish almost across the board,” said Josh Graves, senior market strategist at RJO Futures in Chicago. A year-end stock market rally also helped lift oil prices as consumer sentiment continued to improve, he said. “It’s a Santa Claus rally. People tend to buy more things that will indirectly drive the price of oil up,” Graves said. U.S. stock indexes rose slightly on Friday, with the S&P 500 index close to logging its best year since 1997. The Nasdaq crossed the 9,000 point mark for the first time on Thursday. U.S. energy firms idled eight working oil rigs, the first reduction in three weeks, as producers followed through on plans to slash spending, energy services firm Baker Hughes Co BRK.N said in its closely followed report.