WTI hits 5-week high on falling inventories, fueling demand


Crude oil inventories fell for the fifth week in a row through Dec. 24, down more than 14 million barrels since late November, about 7% below the five-year average. The bearish part of the report could be found on the production side, with domestic operators increasing their crude production by 200,000 bpd from the previous week to 11.8 million bpd, a 19-month high.

Next, oil traders will focus on the January 4 political meeting between the Organization of the Petroleum Exporting Countries and Russia-led partners, when the producer group decides production quotas for February. The group is expected to increase production by 400,000 bpd next month, in line with its July agreement. In its last meeting on December 2, OPEC + stuck to its plans to increase production for January despite the spread of the omicron variant and calls from Washington to release more supplies into the market. in a context of soaring gas prices. Russian Deputy Prime Minister Alexander Novak has previously said that OPEC + wants to provide the market with clear guidance and not deviate from the policy, which prompts the group to gradually increase production. However, the rapid spread of omicron and the renewal of quarantine restrictions in some European countries and China could prompt the alliance to pause to add more supplies to the market.

World Health Organization chief Tedros Adhanom Ghebreyesus told a conference in Geneva this week that a “tsunami” of COVID-19 cases caused by the omicron variant would put pressure on hospital systems already on the “brink of collapse”.

“I am very concerned that the omicron, being more transmissible, circulating at the same time as the delta, is leading to a tsunami of cases,” the WHO director general said on Tuesday. “This is and will continue to put immense pressure on exhausted health workers and health systems on the brink of collapse.”

In Europe, the UK, France and Italy have all set new records for daily COVID-19 cases since the start of the pandemic. British officials have shown little appetite for further COVID closures, saying on Monday there would be no new restrictions until the end of 2021 as health authorities await more data on whether hospitals can do so facing a wave of omicron infections. The daily number of new COVID-19 infections in England is the highest since March at 122,189, although hospitalizations have yet to show a marked increase.

During the session, West Texas Intermediate February futures contracts advanced $ 0.58 to settle at $ 76.56 per barrel. February Brent crude gained $ 0.29 to settle $ 79.23 bbl before the contract expired Thursday afternoon (12/30) with March Brent standing near parity. January NYMEX RBOB futures rose 2.46 cents or 1.1% to 2.2717 gallons, with the February contract of the following month increasing its haircut to 0.51 cents. The January ULSD contract added 0.64 cents to 2.3778 gallons and the February contract kept its discount at 0.106 cents. The January RBOB and ULSD contracts expire on Friday 31/12 / afternoon.

Liubov Georges can be contacted at [email protected]