Oil rises as fuel demand holds up despite surge in Omicron cases

China, the world’s biggest oil importer, reported 207 new confirmed coronavirus cases and 27 new asymptomatic cases on Thursday, but no new deaths. Australian cases hit a new record of more than 19,000 daily infections.

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New York: Oil prices rose on Thursday to extend several consecutive days of gains, buoyed by data showing U.S. fuel demand holding up well despite soaring omicron coronavirus infections.

Brent crude futures rose 17 cents, or 0.2%, to $79.40 a barrel at 0217 GMT, climbing for a fourth day in a row.

U.S. West Texas Intermediate (WTI) crude futures rose 23 cents, or 0.3%, to $76.79 a barrel for a seventh straight session of gains.

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.

At the same time gasoline and distillate inventories fell, compared with analysts’ forecasts for stock builds, indicating demand remains strong.

Further supporting sentiment, governments around the world were trying to limit the impact of record numbers of new Covid-19 infections on economic growth by easing testing rules and narrowing who needs to isolate as close contacts of positive cases.

China, the world’s biggest oil importer, reported 207 new confirmed coronavirus cases and 27 new asymptomatic cases on Thursday, but no new deaths. Australian cases hit a new record of more than 19,000 daily infections.

Earlier to this, Oil prices steadied on Wednesday, after government data showed U.S. crude and fuel inventories fell last week, but concern that rising coronavirus cases might reduce demand weighed.

Brent crude climbed 29 cents, or 0.37%, to settle at $79.23 per barrel. U.S. West Texas Intermediate (WTI) crude settled 58 cents, or 0.76%, higher at $76.56 per barrel.

The average number of daily confirmed coronavirus cases in the United States hit a record high of 258,312 over the last seven days, a Reuters tally on Wednesday found.

Both oil futures contracts earlier traded at their highest in a month after U.S. government data showed lower oil inventories.

Crude inventories fell by 3.6 million barrels in the last week to 420 million barrels, compared with analysts’ expectations in a poll for a 3.1 million-barrel drop.

U.S. gasoline stocks fell by 1.5 million barrels over the same period to 222.66 million barrels, compared with analysts’ expectations in a poll for a 0.5 million-barrel rise.​

Distillate stockpiles fell by 1.7 million barrels to 122.43 million barrels, versus expectations for a 0.2 million-barrel rise, the EIA data showed.

“It’s draws across the board which are supportive,” said John Kilduff, partner at Again Capital LLC in New York. “We do continue to creep up on domestic production, which is positive.”

Oil prices have been underpinned by Ecuador, Libya and Nigeria declaring forces majeures this month on part of their oil production because of maintenance issues and oilfield shutdowns.

Russian Deputy Prime Minister Alexander Novak said that the OPEC+ group of producers has resisted calls from Washington to boost output because it wants to provide the market with clear guidance and not deviate from policy on gradual increases to productions.

Investors are awaiting an OPEC+ meeting on Jan. 4, when the alliance will decide whether to proceed with a planned production increase of 400,000 barrels per day in February.

At its last meeting OPEC+ stuck to its plans to boost output for January despite the spread of the Omicron variant.

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