At 5 week high oil prices

Oil prices closed with gains on Wednesday, in the wake of data showing a sharp decline in US crude reserves, indicating stronger demand for energy. At the same time, traders appear cautiously optimistic, as preliminary studies show that the Omicron mutation causes milder symptoms than previous strains of the virus and eliminates the possibility of tougher restrictions on trade and travel.

In particular, the US Energy Information Administration (EIA) announced that US crude stockpiles fell by 3.576 million barrels in the week ended December 24, while sources said that the American Petroleum Institute late Tuesday estimated that crude stockpiles fell by 3 , 09 million barrels in the same period.

The EIA also reported that gasoline stocks fell by 1.458 million barrels, while spirits stocks fell by 1.726 million barrels. However, crude stockpiles at Cushing, Oklahoma, rose 1.055 million barrels, the agency said. According to the report, US oil production has risen to its highest level since May 2020.

“This report will be perceived as positive by traders,” said Phil Flynn, an analyst at PRICE Futures Group.

“Demand for petrol jumped again last week,” the analyst said, adding that “this report appears to have been drafted close to July 4 despite the Christmas season,” referring to heavy vehicle mobility during the summer season. increases the demand for fuel, compared to Christmas, which is usually a more sluggish period.

Referring to developments in the field of pandemics, Flynn noted that “fears of a drop in demand due to the new mutation seem to have been excessive.”

In this climate, the West Texas Intermediate February delivery added 58 cents, or 0.8%, to settle at $ 76.56 a barrel on the New York Mercantile Exchange, the highest level since Nov. 24. The sixth consecutive earnings session is the biggest uptrend for the WTI since an 8-day rally ended on February 10, according to FactSet.

The Brent oil February delivery strengthened 29 cents, or 0.4%, to $ 79.23 a barrel on the ICE Futures Europe level, the highest level since November 25.

In weekly basis, WTI is up 4.4% so far and Brent is up 5.4%, with both contracts heading for annual gains of more than 54%, according to FactSet.

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