World’s Top Oil Consumer and Oil Prices

Oil prices rose on December 16 as U.S. implied consumer petroleum demand jumped to a record in the U.S. The demand for oil in the world’s top oil consumer surged even as the omicron variant of the coronavirus threatens to dent oil consumption globally.

A signal from the country’s central bank to tackle inflation before it derails the economy also boosted oil prices.

Brent crude oil futures gained 72 cents or 1% to $74.60 a barrel by 07:52 GMT. West Texas Intermediate (WTI) crude futures advanced 79 cents or 1.1% to $71.66.

In spite of the omicron variant, the demand for petroleum products hit a record high according to EIA’s oil inventory report. 

Oil prices and various factors

U.S. crude inventories fell 4.6 million barrels in the week to December 10 based on the data provided by the U.S. Energy Information Administration (EIA).

Importantly, a product supplied by oil refineries jumped in the most recent week to 23.2 million barrels per day (bpd). It jumped due to gains in gasoline, diesel, as well as other refined products. 

Analysts think that the rise reflects both expectations for a surge of people for the holidays and the loosening of supply-chain bottlenecks. 

Meantime, the Federal Reserve said it would end its pandemic-era bond purchases in March. Also, the central bank plans to raise interest rates as unemployment remains low and inflation has climbed. 

Covid’s new variant continues to influence the oil industry. Lingering worries about omicron variant curbed price gains.

South Africa, as well as Britain, reported record daily Covid-19 cases. Its new variant continues to spread in Britain and South Africa. Companies across the globe asked employees to work from home, which could limit oil demand.