Oil Fell After the Biggest Importer Reduced Import Quotas

Oil prices fell on Thursday. Prices declined after China reduced the first batch of crude import allocations for 2022, offsetting the impact of U.S. data showing fuel demand had held up in spite of the omicron variant.

Brent crude futures dropped 27 cents or 0.3% to $78.96 a barrel at 13:22 GMT. U.S. On Thursday, West Texas Intermediate (WTI) crude futures fell 36 cents or 0.5% to $76.20 a barrel. 

Oil prices pared earlier gains after the world’s top crude importer lowered the first batch of 2022 import quotas. China reduced the first batch of import quotas to mostly independent refineries by 11%. 

Oil prices in 2021

This year, global oil prices rebounded by between 50% and 60% as the demand returned to pre-pandemic levels. OPEC’s decision also affected oil prices. OPEC and its allies worked together to stabilize the oil market.

Two days ago, U.S. Energy Information Administration released interesting data. The data showed that crude oil inventories dropped by 3.6 million barrels in the week to December 24. 

It is worth mentioning that, gasoline, as well as distillate inventories, also declined, versus analysts’ forecasts for builds, indicating demand remained strong in spite of record Covid-19 cases in the country. 

Oil prices also benefited from steps taken by governments. They tried to limit the impact of record high Covid-19 cases on economic growth. 

OPEC+ will meet in several days on January 4 to decide whether to continue increasing output in February. 

This week, Sauda Arabia’s King Salman made a comment about OPE+. He stated that producers must comply with the pact. 

OPEC’s member Iraq said it would support sticking to existing OPEC+ policies. The group plans to raise output by 400,000 barrels per day in February.