Oil falls one month high after US fuel inventory rises Reuters

Florence Tan and Naveen Thukral

SINGAPORE (Reuters) – Oil prices lost ground on Thursday after falling to a one-month high after rising fuel prices in the United States due to falling demand.

Global benchmark futures fell 63 cents or 0.8% to $ 80.17 a barrel from 0727 GMT. The US West Texas Intermediate (WTI) gross futures lost 58 cents, or 0.8%, to $ 77.27 a barrel.

oil depots fell last week, and gasoline inventories rose by more than 10 million barrels, the largest construction of the week since April 2020, as refined supply to refineries refined fuel demand. [EIA/S]

“Demand for implicit products, especially gasoline, has declined, suggesting that the public was cautious with the rise in cases of rising Omicron variants with travel,” said Caroline Bain, chief economist at Capital Economics.

“It is likely that these fears will continue for a few more weeks.”

The United States reported nearly one million COVID-19 cases on Monday, setting a world record because the spread of the Omicron variant showed no signs of slowing down, and heavy snow also disrupted traffic.

Also, minutes from a meeting of the U.S. Federal Reserve that policy makers could raise rates faster than expected by the markets weighed on risky assets like oil. [MKTS/GLOB]

On Wednesday, Brent and WTI futures peaked in late November, with OPEC + ‘s decision to increase supplies easing concerns about a large surplus in the first quarter.

OPEC +, a member of the Organization of the Petroleum Exporting Countries, a group that includes Russia and other producers, agreed on Tuesday to add another 400,000 barrels (bpd) of supplies per day in February, as it has done every month since August.

“Our benchmark case now assumes that the alliance will completely cut the remaining 2.96 million bpd cuts in oil production by September 2022,” analysts at JP Morgan said in a statement.

“With signs of demand for the Omicron variant, low stocks and greater market weakness for supply disruptions, we see the need for more OPEC + barrels,” the bank said. JP Morgan predicted that Brent prices would average $ 88 a barrel in 2022, up from $ 70 last year.

Meanwhile, TC Energy (NYSE:) ‘s 590,000 bpd Keystone oil pipeline began operating on Wednesday after a one – day shutdown, the company said, as parts of western Canada coped with the cold winter weather.