Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Oil rallies even as OPEC+ boosts output, U.S. fuel demand dips

CommoditiesJan 05, 2022 03:22PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. REUTERS/Angus MordanT/File Photo 2/2

By David Gaffen

NEW YORK (Reuters) - Oil prices rose on Wednesday, extending gains even after OPEC+ producers stuck to an agreed output target rise for February and U.S. fuel inventories surged due to sliding demand as COVID-19 cases spiked.

Brent crude futures ended up 80 cents, or 1%, to $80.80 a barrel. U.S. West Texas Intermediate (WTI) crude futures closed up 86 cents, or 1.1%, to $77.85.

The market pared gains late in the day after the release of minutes from the latest U.S. Federal Reserve meeting that showed policymakers may have to raise rates more quickly than markets anticipated. Oil dropped, following other risk assets like stocks.

U.S. crude stocks dropped by 2.1 million barrels, owing in part to tax incentives for producers to reduce inventories before year-end.

However, gasoline inventories jumped by more than 10 million barrels, and stocks of distillates rose by 4.4 million barrels. Analysts cited soft demand during the last week of 2021 as people hunkered down due to the Omicron variant of the coronavirus. [EIA/S]

The United States reported nearly 1 million new coronavirus infections on Monday, the highest daily tally of any country in the world and nearly double the previous U.S. peak set a week earlier. Overall product supplied, a proxy for demand, fell sharply, though the last four weeks has seen stronger demand than the same period two years ago before the pandemic's onset.

"Implied product demand – particularly for gasoline – slumped, suggesting that the public were cautious about travel in the wake of surging cases of the Omicron variant. These fears are likely to persist for a few weeks yet," wrote Caroline Bain, chief commodities economist at Capital Economics.

OPEC+ producers, which include members of the Organization of the Petroleum Exporting Countries along with Russia and others, on Tuesday agreed to add another 400,000 barrels per day of supply in February, as they have done each month since August.

Still OPEC+ will probably struggle to reach that target, as members including Nigeria, Angola and Libya face difficulties ramping up production, Barclays (LON:BARC) analysts said in a note. Even as the group boosts targets, "actual incremental supplies are likely to be much smaller, similar to the demand effect from Omicron," the bank wrote.

Oil rallies even as OPEC+ boosts output, U.S. fuel demand dips
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (6)
Andrew Ulferts
Andrew Ulferts Jan 05, 2022 1:44PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thw real question is: Why is the media lying to you EVERY DAY? Enemy of the people. News does not ever need a narrative. It has no agenda. God bless you readers, please pray for discernment.
Andrew Ulferts
Andrew Ulferts Jan 05, 2022 1:42PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
US oil demand is not down, it is through the roof. Look at an actual report for the last week. We imported millions of bbl, and millions of bbl of gas, and released 1.34 million bbl from our SPR. Don’t worry y’all. I’ll post real news since no one else will.
Max German
MaxiGE Jan 05, 2022 9:34AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
ponzi scheme
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Jan 05, 2022 1:21AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Putin wants to go Back to the USSR. you don't know how lucky you are boy
Andrew Ulferts
Andrew Ulferts Jan 04, 2022 11:23PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Prediction : WTI green by morning (US)
MOHD FADZLI AHMAD
MOHD FADZLI AHMAD Jan 04, 2022 11:23PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
What do u suggest if we trade GDPUSD?
Bakkalcha Oromoo
Bakkalcha Oromoo Jan 04, 2022 10:48PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Yes
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email