Oil prices are rising as US crude inventories shrink, according to Reuters

Mohi Narayan and Naveen Thukral

SINGAPORE (Reuters) – Oil prices rose after rising on Wednesday night as industry data showed a decline in U.S. inventories, boosting demand sentiment.

It rose 16 cents, or 0.2%, to $ 79.10 a barrel for 0441 GMT. US West Texas Intermediate (WTI) crude rose 5 cents, or 0.07%, to $ 76.03 a barrel.

“Long-term coverage of Asia today is noticeable in a session that is not otherwise,” OANDA analyst Jeffrey Halley said in a statement.

Both contracts are trading near the highest monthly levels, supported by global equities.

Asset-to-equity asset classes have recovered losses since the end of November, when the Omicron variant of COVID-19 went to investors in search of security.

Data from the U.S. Petroleum Institute fell 3.1 million barrels in the week ended Dec. 24, market sources said on Tuesday night, according to expectations from nine analysts surveyed by Reuters.

Gasoline inventories were down 319,000 barrels lower than expected, and distillate stocks fell 716,000 barrels compared to expectations of 200,000 barrels.

The U.S. Energy Information Administration’s weekly data will be released on Wednesday.

The price of oil has been protected by three oil producers this month because they have declared unavoidable cases in part of their oil production due to maintenance problems and the closure of oil fields.

Russia is unlikely to reach its pre-pandemic oil production target in May due to a lack of spare production capacity, but analysts and company sources said on Tuesday that it could do so later in the year.

Deputy Prime Minister Alexander Novak, who is in charge of Moscow’s ties with the OPEC + oil producer group, said production was expected to reach pre-pandemic levels by May, or about 11.33 million barrels (bpd) per day of condensed oil and gas. Viewed April 2020.

Investors are awaiting the January 4 OPEC + meeting, and the alliance will decide whether to start increasing production to 400,000 barrels a day in February.

At its last meeting, OPEC + maintained plans to increase production in January, despite Omicron.