Oil growing due to reduction in reserves in U.S.
2022.12.21 00:44
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Oil growing due to reduction in reserves in U.S.
Budrigannews.com – On Wednesday, worries about rising COVID-19 cases in China, China’s largest oil importer, were offset by a larger-than-expected stock draw. This resulted in little change in oil prices.
By 04:04 GMT, futures were up 7 cents, or 0.1%, to $80.06 per barrel, and WTI crude futures were up 4 cents, or 0.1%, to $76.27.
According to market sources citing data from the American Petroleum Institute, U.S. crude inventories decreased by approximately 3.1 million barrels in the week ending December 16. Nine analysts polled by Reuters estimated a 1.7 million barrel decrease in stocks.
Gas inventories rose by around 4.5 million barrels, while distillate stocks rose by 828,000 barrels, as per the sources, who talked on state of obscurity.
According to Tina Teng, an analyst with CMC Markets, “The larger-than-expected draw in oil inventories was a bullish factor as undersupply issues may be worsened again on the back of China’s reopening” and “the U.S.’s refill of its Strategic Petroleum Reserve.”
In the meantime, in an interview with the Saudi state news agency, Saudi energy minister Prince Abdulaziz bin Salman stated that OPEC+ members exclude politics from their assessments and forecasts.
The minister went on to say that the OPEC+ decision to cut oil production, which was widely criticized, turned out to be the right one for helping the market and industry stay stable.
Teng continued, “These comments boosted oil prices and suggest that OPEC + may continue to keep supply tight to support oil prices.”
However, oil prices did not rise as a result of growing concerns regarding an increase in COVID-19 cases in China as the nation began to implement its strict zero-COVID policy.
The country’s strategy had kept the number of infections and deaths among its population of 1.4 billion relatively low, but the World Health Organization this year deemed it not “sustainable” due to concerns about how it would affect citizens’ lives and the economy.
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As Chinese refiners scrambled to secure additional cargoes ahead of a price cap imposed by the Group of Seven nations on Dec. 5, China’s crude oil imports from Russia increased 17% in November compared to the previous year.
The increment made Russia the top oil provider for China in front of Saudi Arabia.
