DTN Oil

WASHINGTON (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange rallied in afternoon trade Thursday, lifting both the U.S. and international crude benchmarks to their highest settlements in nine months on hope that a coronavirus vaccine combined with stimulus measures in the United States and Eurozone will allow for a renewed recovery in fuel demand.

On the session, NYMEX January West Texas Intermediate futures surged $1.26 or 3% to settle at $46.78 barrel (bbl) and the Brent contract on ICE advanced $1.39 to $50.25 bbl. NYMEX January ULSD futures spiked 3.68 cents to $1.4357 gallon and January RBOB futures added more than 4 cents with a $1.3166 gallon settlement.

The European Central Bank (ECB)announced Thursday a massive increase in its asset purchases by 500 billion euros, bringing the total stimulus package to 1.85 trillion euros for the Eurozone's ailing economy. The region has been hard hit by the second wave of COVID-19 infections, with the bloc's major economies, Germany and France, likely to remain under quarantine measures until mid-January. The ECB also plans to extend those purchases to at least the end of March 2022 as it anticipates a delayed and uneven recovery in the months ahead.

"The monetary policy measures taken today will contribute to preserving favorable financing conditions over the pandemic period, thereby supporting the flow of credit to all sectors of the economy, underpinning economic activity and safeguarding medium-term price stability," read a statement from the ECB.

In Washington, D.C., efforts to pass a coronavirus stimulus bill appear more urgent Thursday after weekly unemployment claims unexpectedly jumped to 853,000 during the week ended Dec. 5, heightening market expectations Congress will work out their differences and agree to federal aid for millions of hard-hit businesses and individuals suffering from lost business due to the pandemic and lockdowns aimed to slow the spread of infections. Initial claims came in well above expectations for 724,000 applications and to the highest number of first-time filings since mid-September. The sharp increase suggests the persistence of the pandemic and deleterious effect on the U.S. economy joined by the latest round of quarantine measures are having a deeper-than-expected impact on the jobs market as layoffs accelerate.

Daily COVID-19 deaths reached 3,253 on Wednesday, lifting the U.S. total since the start of the pandemic to 289,740 deaths, with a record 106,219 people hospitalized.

Mass unemployment and the relentless surge in coronavirus infections continue to weigh on economic growth and demand for refined fuels. Government data released Wednesday showed U.S. combined crude, gasoline and distillate fuel supplies spiked a massive 24.64 million bbl during the week ended Dec. 4, with a 15.2 million bbl of the build in commercial crude inventories. The large build is being deemed as an anomaly by some industry followers, partly blamed on issues along the Houston Ship Channel last week that inflated import volumes and depressed export flow.

Liubov Georges can be reached at liubov.georges@dtn.com

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