Oil Prices Rise as U.S Sees More than Expected Drop in Stockpiles
Prices of crude oil jumped higher midweek over a more than expected decline in the United States inventories ahead of the Christmas holiday. US crude oil stocks including the Strategic Petroleum Reserve fell by 7.3 million barrels in the week ended Dec. 17 following a decrease of 6.5 million barrels in the previous week.
Excluding inventories in the SPR, commercial crude oil stocks fell by 4.7 million barrels after a 4.6 million barrel drop in the previous week.
Stocks in the SPR fell by 2.5 million barrels in the week after a 2 million barrel decline in the previous week.
Overall crude oil stocks were down 0.7% from the previous week and 10.3% from a year earlier. Crude oil inventories are about 8% below their five-year average for this time of the year.
Gasoline stocks rose by 5.5 million barrels, much larger than the 650,000 barrel increase expected. Gasoline stocks were up 2.5% from the previous week but down 5.7% from a year earlier.
Distillate stocks rose by 400,000 barrels in the current week, compared with an expected decrease of 250,000 barrels. Distillate stocks were up 0.3% from the previous week but down 16.6% from a year earlier.
Refineries operated at 89.6% of capacity, down slightly from 89.8% in the previous week. Brent crude climbed 2.70% to $74.00 per barrel overnight and rose slightly to $74.10/b in Asia on Wednesday.
West Texas Intermediate crude jumped 3.0% to $71.25/b overnight and added $0.10/b to $71.35/b in Asia, Halley said. Trading in Asia reflects the current cautious approach in Asian equity markets, the analyst said.
Oil markets remain volatile with prices jumping higher following lower US crude inventories and a quiet news cycle, OANDA analyst Jeffrey Halley said in a Wednesday note.
The official US crude inventories are projected to fall by 2.5 million barrels, Halley said. If omicron concerns continue to dissipate, lower inventories could propel prices higher again, the analyst noted.
The Organization of Petroleum Exporting Countries and its allies, or OPEC+, still has the option to curb output to support prices as their meeting remains open, which continues to be a warning to overenthusiastic bears, according to Halley. #Oil Prices Rise as U.S Sees More than Expected Drop in Stockpiles
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