Crude oil futures are recording gains in the middle of the trading week, looking to avoid snapping a five-session winning streak. US crude prices have had a terrific year, despite tepid fourth=quarter weakness. Will oil top $80 in 2022?
February West Texas Intermediate (WTI) crude oil futures advanced $0.28, or 0.37%, to $76.29 per barrel at 14:42 GMT on Wednesday on the New York Mercantile Exchange. WTI contracts are up more than 5% this week, adding to their year-to-date rally of 58%.
Brent, the international benchmark for oil prices, topped $79 midweek. March Brent crude futures rose $0.37, or 0.47%, to $79.01 a barrel on London’s ICE Futures exchange. Brent is also up 53% in 2021.
According to the US Energy Information Administration (EIA), domestic crude oil supplies declined 3.576 million barrels in the week ending December 24, higher than the market forecast of -3.143 million barrels. The reading is down from the previous week’s drawdown of 4.715 million barrels.
Oil stockpiles at the Cushing, Oklahoma storage facility increased 1.055 million barrels, down from 1.463 million barrels in the previous week.
Gasoline supplies fell 1.458 million barrels, while distillate stocks decreased 1.726 million barrels.
On Friday, the Baker Hughes Oil Rig Count will be released. It has climbed to its best evel since the spring of 2020, flirting with the 500 level.
Crude prices have been climbing higher over the last week on early medical data suggesting that the Omicron variant of COVID-19 produces milder symptoms. But public policymakers and investors are still worried about the explosion in coronavirus infections across the globe.
Global supply issues surrounding output problems in Ecuador, Libya, and Nigeria have also supported oil prices.
It was further reported that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+, will comb through their plans to increase daily crude production to 400,000 barrels per day in February.
So far, OPEC+ has rejected pleas to increase production, but officials say they want to offer clear guidance to the market.
Ultimately, heading into 2022, the energy markets are anticipating lackluster supply and surging demand, especially if air travel is largely unaffected this year.
In other energy commodities, February natural gas futures rose $0.065, or 1.6%, to $4.12 per million British thermal units (btu). February gasoline futures dipped $0.0062, or 0.28%, to $2.24 a gallon. February heating oil futures slid $0.0071, or 0.3%, to $2.3539 per gallon.