Despite recent volatility in US economic data, aggregate fuel demand has reached pre-pandemic levels.
see photosProducts supplied in the last four weeks have come to about 21 million barrels per day
Oil prices rose higher on Wednesday after US crude stocks fell to their lowest level in three years as refining activity improved from recent storms.
Despite recent volatility in US economic data, aggregate fuel demand has reached pre-pandemic levels. Products supplied over the past four weeks have come in at around 21 million barrels per day, not far from the peak of 2019.
US crude oil reserves fell 3.5 million barrels last week to 414 million barrels, the lowest since October 2018, the US Energy Information Administration said on Wednesday.
“Crude oil prices remain supportive as worldwide demand improves and inventories continue to grow,” said Andrew Lipo, president of Lipo Oil Associates in Houston.
US West Texas Intermediate (WTI) crude futures rose $1.74, or 2.5%, to $72.23, while Brent crude futures rose $1.83, or 2.5%, to $76.19 a barrel.
US crude oil reserves fell by 3.5 million barrels last week to 414 million barrels, the lowest since October 2018.
Oil facilities in the Gulf of Mexico continue to return to production, the EIA said, with weekly output rising 500,000 bpd to 10.6 million bpd in the most recent week. BP said Wednesday that all four of its offshore facilities in the area have resumed operations after Hurricane Ida, brought back online and production on Sept.
Support prices have also been placed in trouble by OPEC members struggling to increase production. Rising prices in other markets such as natural gas have also supported oil, with the lack of an energy market leading to a supply crisis in Europe and Asia.
“Given the variety of contributory factors in the energy sector, particularly skyrocketing natural gas prices … the price decline is likely to be short-lived,” said Jeffrey Haley, an analyst at brokerage OANDA.
Iraq’s oil minister said OPEC and its allies are working to keep crude prices near $70 a barrel as the global economy recovers, state news agency INA reported on Wednesday.
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The US Federal Reserve, which began a two-day policy meeting on Tuesday, indicated that interest rate hikes could happen faster than expected. Tighter monetary policy could reduce investors’ tolerance for riskier assets like oil.
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