Oil futures rose Thursday, with investors shaking off worries about the omicron variant of the coronavirus after upbeat data on U.S. inventories and implied demand.
West Texas Intermediate crude for January delivery CL00, 0.99% CLF22, 0.99% rose 57 cents, or 0.8%, to $71.44 a barrel on the New York Mercantile Exchange. February Brent crude BRN00, 0.76% BRNG22, 0.74%, the global benchmark, was up 55 cents, or 0.7%, at $74.43 a barrel on ICE Futures Europe.
Oil futures were lifted Wednesday after the Federal Reserve, as expected, moved to more aggressively reduce its monthly bond purchases and penciled in three interest rate increases in 2022. Equity markets also rallied after the decision.
“The fact that the financial market environment is generally somewhat less risk-averse lent buoyancy on the one hand: with its accelerated exit from its ultra-expansionary monetary policy, the Fed is apparently giving the impression that everything is under control,” wrote analysts at Commerzbank, in a note.
Also, data from the Energy Information Administration on Wednesday was positive, with U.S. crude inventories seeing their biggest weekly fall since September.
“Besides high U.S. exports, this was chiefly due to robust U.S. demand: U.S. gasoline demand increased to 9.5 million barrels per day, thereby exceeding its pre-pandemic level from December 2019. And daily demand for distillates even surged by more than 1.3 million barrels week-on-week to 4.9 million barrels,” the Commerzbank analysts noted.