Oil holds gains on surprise US stock draw and vaccine optimism

Oil held onto eight-month highs after a surprise decline in U.S. crude supplies added to optimism that breakthroughs on a Covid-19 vaccine and an impending rollout will kickstart a strong rebound in demand next year.

Futures in New York rose as much as 1.8% on Wednesday. An Energy Information Administration report showed U.S. crude stockpiles fell 754,000 barrels last week, along with a 10th straight weekly draw in distillate inventories. Still, the EIA report also showed gasoline stockpiles rose over 2 million barrels last week and crude production ticked higher.

Prices advanced earlier after Chinese and Indian refiners issued a flurry of tenders seeking crude oil for loading in January, highlighting the strong demand coming from parts of Asia.