Capitals – Oil prices jumped on Wednesday, extending their big gains in the previous session following the head of the US Federal Reserve hinted that the bank may raise interest rates at a slower rate than expected, which supports demand for oil in the short term.
The global benchmark Brent crude and the US benchmark West Texas Intermediate crude are trading at their highest levels since the emergence of the mutated Omicron strain of the Corona virus in late November, as it did not damage demand for fuel as much as its predecessors.
Brent rose 22 cents, or 0.3 percent, to $ 83.94 a barrel by 0224 GMT, following jumping 3.5 percent in the previous session.
US crude was not less fortunate than Brent, as it also rose 38 cents, or 0.5 percent, to $ 81.60 a barrel, consolidating its 3.8 percent rise in the previous session.
The US central bank, Jerome Powell, said Tuesday that the world’s largest economy can withstand the current jump in Covid-19 infections with “short-term” effects, adding that the “long way” to tighten monetary policy.
“The long path to normal means the economy will continue to see a lot of support during the first half of the year and this is good news for crude oil prices,” said Edward Moya, an analyst at OANDA.
double demand
Meanwhile, American Petroleum Institute data showed a weaker picture of fuel demand, with a smaller-than-expected drop in crude oil inventories and a larger-than-expected increase in gasoline and distillate inventories.
Crude stocks fell 1.1 million barrels for the week ending January 7, according to market sources, citing figures from the American Petroleum Institute. This is less than the 1.9 million barrels that 10 analysts had expected.
Gasoline stocks rose 10.9 million barrels, compared with analyst expectations for a 2.4 million barrel increase. And distillate stocks, which include diesel and heating oil, rose three million barrels, compared to expectations for an increase of 1.8 million barrels.
However, the US Energy Information Administration raised its forecast for oil demand on Tuesday revived the market, as it expected total US demand to rise 840 thousand barrels per day in 2022 from last year, up from previous expectations of an increase of 700 thousand barrels per day.
At the same time, the Energy Information Administration lowered its production forecast for 2022, forecasting US oil production to rise by 640,000 barrels per day, down from its previous forecast of an increase of 670,000 barrels per day.
(Archyde.com)