Crude oil prices rise amid a decline in weekly inventories

The wavering of crude oil prices over the past week is a sign that investors just want to close their books and wait for the new year. On Thursday, crude oil futures were on a high as a reaction to yesterday’s bullish stockpiles data from the EIA. Besides, investors looking to trade oil are keeping an eye on the OPEC+ meeting scheduled for next week. As at 05.28 GMT, WTI futures were up by 0.06% to $48.32. Similarly, Brent futures rose by 0.09% to trade at $51.56.

Weekly US crude oil inventories decline

One of the factors that is offering support to crude oil prices is the decline in the weekly US inventories. On Wednesday, the Energy Information Administration released bullish figures on oil stockpiles. For the week ending on 25^th December, the amount of oil in storage declined by 6.065 million barrels. The figure was better than the forecasted -2.583 million barrels. In the previous week, crude oil inventories had reduced by 0.562 million barrels.

Prior to EIA’s press release, the American Petroleum Institute had presented stockpile figures that were just as bullish. According to the agency, the US crude oil inventories declined by 4.785 million barrels against the previous week’s increase of 2.7 million barrels. Analysts had forecasted a decrease of 2.1 million barrels.

According to EIA’s data, last week’s gasoline inventories are also better than expected. The stockpiles dropped by 1.192 million barrels, which is higher than the -1.125 million barrels recorded in the preceding week. Besides, the number has surpassed experts’ prediction of +1.662 million barrels.

Notably, the distillates stocks took a different turn. In the previous week, the stocks had reduced by 2.325 million barrels. According to analysts, the levels would have risen by 0.529 million barrels last week. However, the released data missed the two readings by coming in at +3.095 million barrels.    

Investors await January’s OPEC+ meeting

Crude oil prices are also reacting to the oncoming OPEC+ meeting on 4^th January 2021. The 23-country alliance will decide on whether they will continue to gradually increase oil supplies. On a monthly report, the coalition lessens its estimates of the global fuel consumption by 1 million bpd for 2021’s Q1. It further predicts that demand for the commodity will rise by 500,000 barrels during this period. This amount is similar to the agreed hike in January.

Some member countries such as Russia plan to support further increase in supply at the meeting. Russia’s Deputy Prime Minister Alexander Novak said, “If the situation is normal, stable, we will support the increase. We must reach levels that were envisaged earlier, from Jan. 1, gradually, without pulling the market too much.”