Oil is marginally higher due to a larger-than-expected inventory drop.
London, Thursday, 30 December 2021 -
Oil prices rose marginally on Thursday as US oil stocks fell more than predicted, falling for the fifth week in a straight, but the omicron version is projected to continue to depress market confidence in the coming year.
At 0635GMT, international benchmark Brent crude was trading at $79.24 per barrel, up 0.03 percent from the previous session's close of $79.21 per barrel.
The American benchmark West Texas Intermediate (WTI) traded at $76.62 per barrel at the same time, up 0.07 percent from the previous session's close of $76.56 per barrel.
Investors were relieved by the larger-than-expected decline in US crude oil stocks, signifying a resurgence in petroleum demand in the US and putting upward pressure on prices.
According to the most recent statistics issued by the Energy Information Administration, US commercial crude oil stocks fell by 0.8 percent during the week ending December 24. (EIA).
Inventories dropped by 3.6 million barrels to 420 million barrels, beating market expectations of a 3.2 million-barrel decline. During that time, gasoline inventories fell by 1.5 million barrels to 222.7 million barrels.
However, due to the rapid spread of omicron around the world, which has created negative market sentiment on global economies and oil demand as more governments explore imposing restrictions, the upward trend in prices has been halted.
On Wednesday, the United Kingdom recorded 183,037 cases of COVID-19, a new high for daily infections.
The fast-moving omicron version of COVID-19 is also creating a "tsunami of cases," leaving health systems near failure, tiring health workers, and jeopardizing the goal of ending the pandemic's acute phase in 2022, according to WHO Director-General Tedros Ghebreyesus.
Germany's health minister, Karl Lauterbach, also warned that in the next weeks, there will be a major increase in coronavirus infections.
"The true number of new cases every day is likely to be two to three times higher than what was reported throughout the holiday season." In addition, the number of omicron infections is rising dramatically. "This is concerning to us," he said at a press conference in Berlin.
The impending meeting of the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, on January 4 is being closely watched by investors. In February, the company will determine whether or not to expand output by 400,000 barrels per day (bpd).
At their previous meeting, OPEC+ producers agreed to stay to the planned output pattern, despite calls from some countries, particularly the United States, to increase production.
Saudi Crown Prince Mohammed bin Salman was quoted in international media outlets on Wednesday as stating that the OPEC+ output arrangement is "vital" to oil market stability and that producers must adhere to the agreement.
(Reporting by: The Decision Maker – Energy editors)