Oil prices extended gains on Tuesday December 28th, with Brent crude trading near $80 a barrel despite the rapid, worldwide spread of the Omicron coronavirus variant.
WTI also continued a months-long rally, rising to $76.28. U.S. crude oil prices hit a high of $86.40 per barrel in October this year.
Oil’s rise continued upward despite headwinds from the Omicron variant with support by supply outages and expectations that U.S. inventories fell last week, according to Reuters. A preliminary Reuters poll showed on Monday that U.S. crude oil inventories are likely to have dropped for the fifth week in a row, while gasoline inventories were seen mostly unchanged last week.
The U.S. EIA estimated that world crude oil consumption exceeded crude oil production for five consecutive quarters, starting in the third quarter of 2020. But the EIA expects that trend to reverse: the U.S. agency forecasts global oil inventories will begin building in 2022, driven by rising production from OPEC+ countries and the United States and slowing growth in global oil demand.
The EIA said it expects this shift will put downward pressure on the Brent price, which it predicts will average $72 a barrel during 2022.
