Oil prices surged, nearly 4%, in the past session on tight supply and expectations that the increasing number of Covid-19 virus infections and the spread of the Omicron variant will not derail the global economic recovery. .
The USD weakened in this session and the shortage of supply also contributed to the strong increase in prices.
Accordingly, the price of Brent oil on the London floor increased by 2.85 USD, or 3.5%, to 83.72 USD/barrel, the highest level since early November. In the previous session, this oil price decreased by 2 %.
U.S. light sweet oil (WTI) ended the session up $2.99, or 3.8%, to close at $81.22, the highest price since mid-November. this oil fell 0.8%.
Federal Reserve Chairman Jerome Powell said he expected the impact of Omicrons on the economy to be short-lived, adding that the next quarters of the economy could have a negative impact on the economy. may develop very positively after the number of infections with this variant decreases.
“Omicron has yet to do the same damage as the devastating Delta variant and likely never will, so the economic recovery is global,” said Jeffrey Halley, analyst at brokerage OANDA. The bridge is still on the right track.”
Bent oil prices have surged 50% in 2021 and will continue to rise in 2022 as demand recovers to near pre-pandemic levels, amid the Organization of the Petroleum Exporting Countries and its allies, Collectively known as OPEC+, 2020 has curbed a large amount of production.
Although OPEC+ is currently on a roadmap to gradually restore output, the lack of capacity in some OPEC countries has kept the monthly amount of oil added to the market below the 400,000 bpd agreed by the group. last year.
Recent power outages in Libya also boosted prices, and the Libyan National Oil Corporation said it was suspending exports from the port of Es Sider.
“The combination of data – which suggests demand will be stronger than anticipated and OPEC supply may not grow as quickly as demand – is the reason why,” said Phil Flynn, senior analyst at Price Futures Group. why the price is going up”.
Information from the American Petroleum Institute showed that the country’s crude oil inventories fell by nearly 1.1 million barrels last week, although lower than business predictions of a decrease of 2 million barrels, but showed a trend. decrease continues. Last week, US crude inventories fell by 6.432 million barrels, many times the market forecast for a drop of 61,950 million barrels. This is the 7th week in a row that US crude inventories have decreased. Official US crude oil data for the past week will be released on January 12.
In Europe, Euroilstock data showed that regional refineries’ inventories of crude and oil products in December fell more than 11% from a year earlier. At the same time, European jet refining margins have returned to pre-pandemic levels as global aviation activity recovers despite the spread of Omicron.
Refinitiv data showed profits from converting crude oil into jet fuel this week hit a two-year high this week. Global aviation fuel demand continued to recover in December, even after the rapid spread of the Omicron variant caused many flight cancellations.
Data from flight tracking website Flightradar24 shows that the average number of flights departing in seven days globally (as of December 31) increased by 12% from the same week a year earlier, mawcjduf still lower 13.2% of pre-pandemic levels in 2019.
Flight fuel refining margins in Europe are close to pre-pandemic levels.
Meanwhile, the amount of jet fuel oil imported into Europe is tight due to strong demand for this fuel all over the world, from Asia to the US.
According to Refinitiv data, around 653,000 tons of jet fuel imported from Asia and the Middle East are expected to arrive in Northwest Europe in January 2022, down from more than 1 million tons in December. Flight fuel stocks at the Amsterdam-Rotterdam-Antwerp (ARA) storage center are running low.
Refineries in Europe have been prioritizing diesel production over jet fuel production. Industry sources say some plants are now starting to make the transition to increased jet fuel production amid a strong recovery in demand.
Meanwhile, the US government lowered its estimate of oil production growth and raised its oil demand forecast. According to the US Energy Information Administration (EIA), the country’s crude oil production in 2022 is forecast to increase by 640,000 bpd, lower than the 670,000 bpd forecast last month. Total oil demand this year is forecast to increase by 840,000 bpd, higher than the 700,000 bpd forecast last month.
Regarding 2023, EIA has just released the first forecast numbers, according to which the country’s crude oil production is forecasted to increase by 610,000 b/d to 12.41 million b/d in 2023; U.S. gasoline demand is forecast to grow 90,000 bpd to 9.15 million bpd in 2023, bringing total U.S. oil demand up 330,000 bpd to 20.92 million bpd that year.
Reference: Refinitiv
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