Oil rising due to bad weather in U.S.
2022.12.22 11:20
Oil rising due to bad weather in U.S.
Budrigannews.com – Thursday saw a sharper-than-anticipated decline in official U.S. crude stocks as a cold snap struck the United States, propelling oil prices to their highest level in a month.
By 09:15 ET (14:15 GMT), fates exchanged 1.3% higher at $79.28 a barrel, while the agreement rose 1% to $83.05 a barrel.
After official data from the revealed that U.S. crude inventories fell by almost 6 million barrels for the week ending on December 16, which was much more than anticipated, the crude benchmarks are adding to the strong gains that were seen in the session before on Thursday.
Defying expectations, distillate stocks, which include jet fuel, also decreased.
The news that the first major winter storm of the season was affecting large parts of the United States and that warnings of freezing temperatures were now in effect from Washington state to Maine and down to the Gulf of Mexico coast helped set the mood on Thursday.
Although jet fuel could be affected if the storm strikes travel during this busy holiday season, this is likely to result in a large demand for heating oil and overall energy consumption.
Additionally, economic data that were released earlier on Thursday indicated that the number of Americans applying for unemployment benefits rebounded faster in the third quarter than anticipated and increased less than anticipated last week.
This indicates that the U.S. economy has remained resilient in the face of the aggressive monetary tightening, which is good news for crude demand in the world’s largest consumer because it suggests that the recession anticipated for next year may be less severe than anticipated.
However, demand from China, the world’s largest importer, has been impacted by tight mobility restrictions as the nation struggles to contain COVID infections. As a result, oil is poised to finish an extremely volatile year only slightly higher.
Although the Chinese government has recently made the decision to relax these restrictions, the country has seen a significant increase in the number of cases, and the effect on crude demand is still unknown.
Additionally, it is unknown how Russia’s price cap on seaborne crude shipments will affect global supply.
According to a calculation made by Reuters, Russian Urals crude blend exports from Baltic Sea ports may decrease by up to a fifth in December. On the off chance that these figures are borne out, supply is probably going to stay tight into 2023, supporting costs into the new year.
