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Oil prices rise slightly ahead of OPEC+ meeting next week


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Oil prices rise slightly ahead of OPEC+ meeting next week

Reuters.pngCommoditiesDec 30, 2021 
 
 
 
Oil prices rise slightly ahead of OPEC+ meeting next week© Reuters. FILE PHOTO: An aerial view shows Shibushi National Petroleum Stockpiling Base in Kagoshima prefecture, Japan January 18, 2019, in this photo taken by Kyodo. Mandatory credit Kyodo/via REUTERS

By Jessica Resnick-Ault

NEW YORK (Reuters) -Oil prices rose slightly on Thursday on expectations that fuel demand held up despite soaring Omicron coronavirus infections and that OPEC and its allies would continue to increase imports only incrementally.

Gains eased as the world's top importer China cut the first batch of crude import allocations for 2022.

Brent crude futures settled at $79.32 a barrel, up 9 cents, or 0.11%. U.S. crude futures rose 43 cents, or 0.56%, to settle at $76.9 a barrel, the seventh straight session of gains.

"We've had incredibly strong demand numbers through December, so now the question is what OPEC will do," said John Kilduff, a partner at Again Capital Management in New York. Kilduff expects the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to continue to add incrementally to production.

China, the world's top crude importer, lowered the first batch of 2022 import quotas to mostly independent refiners by 11%.

"Market sentiment weakened on worries that the Chinese government could take stricter actions against the teapots," a Singapore-based analyst said, referring to the independent refiners.

Still, global oil prices have rebounded by between 50% and 60% in 2021 as fuel demand roared back to near pre-pandemic levels and deep production cuts by OPEC+ for most of the year erased a supply glut.

U.S. Energy Information Administration data on Wednesday showed crude oil inventories fell by 3.6 million barrels in the week to Dec. 24, which was more than analysts polled by Reuters had expected. [EIA/S]

Gasoline and distillate inventories also fell, versus analysts' forecasts for builds, indicating demand remained strong despite record COVID-19 cases in the United States.

Oil prices also drew support from steps taken by governments to limit the impact of record high COVID-19 cases on economic growth, such as easing testing rules.

OPEC+ will meet on Jan. 4 to decide whether to continue increasing output in February.

Saudi Arabia's King Salman said on Wednesday the OPEC+ production agreement was needed for oil market stability and that producers must comply with the pact.

 

Iraq said it would support sticking to existing OPEC+ policies to raise output by a combined 400,000 bpd in February.

Shell (LON:RDSa) said it had resumed exports of Forcados oil in Nigeria, easing one of three major global outages which also include Ecuador and Libya.

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Oil Up, In Line for Greatest Yearly Gains Since 2009

investing-new.pngCommoditiesDec 31, 2021 
 
 
 
Oil Up, In Line for Greatest Yearly Gains Since 2009© Reuters.

By Gina Lee

Investing.com - Oil prices slipped on the last day of 2021 but is set to post its biggest annual gains in 12 years. This is driven by a mix of global economic recovery and producer restraint, even as COVID-19 infections reached record highs around the world.

Brent oil futures slipped by 0.54% to $78.58 by 9:35 PM ET (2:35 AM GMT) and crude oil WTI futures fell 1.17% to $76.09.

In addition, Brent crude futures is on track to end the year up 53%, while U.S. crude futures is on for a 57% gain. It marks the strongest performance for these two benchmark contracts since 2009, when prices soared more than 70%.

"We've had Delta and Omicron and all manner of lockdowns and travel restrictions, but demand for oil has remained relatively firm. You can attribute that to the effects of stimulus supporting demand and restrictions on supply," said CommSec Chief Economist Craig James.

Today's slip in prices comes after a rise that went on for several straight days. Soaring COVID-19 cases on new year's eve reached new highs across the world, from Australia to the U.S., caused by the highly infectious Omicron coronavirus variant.

U.S. health experts have told Americans to brace for severe disruptions in the near future, as infection rates are likely to worsen amid increased holiday travel, New Year celebrations and school reopenings.

James expects the Organization of the Petroleum Exporting Countries, Russia and allies (OPEC+) to stick to its plan to add 400,000 barrels per day of supply each month. The alliance will meet on Jan. 4, as they continue to wind back sharp production cuts implemented in 2020.

"I think we will see a lot of pressure on OPEC+ to make sure there's enough oil being supplied to market," James said.

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