Futures on US West Texas Intermediate Crude Oil eased from recent two-month peak on Thursday on demand uncertainty in the near term amid continuing surge in new Omicron infections around the world.
Yesterday oil prices scaled highs unseen since mid-November after US crude oil stocks were reported to have dropped to their lowest level since October 2018. US crude oil inventories decreased by 4.553 million barrels during the week ended January 7th, which compares with a median analyst estimate of a 1.904 million drop.
Fuel demand, on the other hand, seemed to have been affected by the rapid spread of the Omicron virus variant. The official report by the US Energy Information Administration (EIA) showed that gasoline inventories had increased by 7.961 million barrels during the week ended January 7th. Analysts on average had anticipated a much smaller inventory build – by 2.408 million barrels.
“Gasoline demand was weaker-than-expected and still below pre-pandemic levels, and if this becomes a trend, oil won’t be able to continue to push higher,” OANDA analyst Edward Moya was quoted as saying by Reuters.
Still, the analyst noted the Omicron impact could be short-lived.
“In reality, the weekly EIA report was less bullish than the headline number, as total crude oil inventories fell 4.8 million barrels but were more than offset by a stock build across refined products,” Citi analysts wrote in an investor note.
Lower crude oil inventories “might have been related to end-of-year tax issues on oil stocks onshore in Texas and Louisiana”, they added.
As of 9:48 GMT on Thursday WTI Crude Oil Futures were edging down 0.12% to trade at $82.54 per barrel. Yesterday the black liquid rose as high as $83.10 per barrel, which has been its strongest price level since November 10th 2021 ($84.97 per barrel).
At the same time, Brent Oil Futures were edging up 0.19% on the day to trade at $84.88 per barrel. Yesterday the commodity rose as high as $85.18 per barrel, which has been its strongest price level since November 10th 2021 ($85.48 per barrel).
Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures
Central Pivot – $82.30
R1 – $83.44
R2 – $84.23
R3 – $85.37
R4 – $86.50
S1 – $81.51
S2 – $80.37
S3 – $79.58
S4 – $78.78
Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures
Central Pivot – $84.48
R1 – $85.43
R2 – $86.12
R3 – $87.07
R4 – $88.01
S1 – $83.79
S2 – $82.84
S3 – $82.15
S4 – $81.45