Oil Prices Rise To $ 80 Due To Tight Supply, Inventories Dip

Oil prices edged up to $ 80 a barrel on Wednesday, with global supply disruptions and lower inventories in the United States offsetting fears that rising coronavirus cases would reduce demand.

Brent crude climbed to $ 79.20 a barrel before falling to trade 24 cents on the day to $ 78.70 at 2:27 p.m. GMT. U.S. West Texas Intermediate (WTI) crude fell 32 cents to $ 75.65 after touching $ 76.17.

Both contracts are trading near their highest levels in a month, helped by strength in global equities.

“The markets overwhelmingly rate the latest variant of the coronavirus as a smoother embodiment, despite its easier contractibility,” OANDA analyst Jeffrey Halley said in a note.

“With market activity very low for the holiday season, investors continue to tentatively forecast a global recovery hitting a minor bump, not a pothole.”

Data from the American Petroleum Institute showed U.S. crude inventories fell 3.1 million barrels in the week ended Dec. 24, market sources said on Tuesday, in line with the expectations of nine analysts polled. by Reuters.

Weekly data from the US Energy Information Administration is due later Wednesday.

Oil prices were supported by Ecuador, Libya and Nigeria which declared force majeure this month on part of their oil production due to maintenance issues and oil field closures.

Russian Deputy Prime Minister Alexander Novak said OPEC + has resisted calls from Washington to increase production because it wants to provide the market with clear directions and not deviate from the policy of gradually increasing production.

Investors are awaiting an OPEC + meeting on January 4, at which the alliance decides to go ahead with a planned production increase of 400,000 barrels per day in February.

At its last meeting, OPEC + stuck to its plans to increase production for January despite Omicron.

(Reporting by Dmitry Zhdannikov, Mohi Narayan and Naveen Thukral; Editing by Michael Perry and Emelia Sithole-Matarise)

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Felix J. Dixon