Oil climbs to $ 75 as US demand, Fed outweigh virus worries

A sticker shows crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. Photo taken November 22, 2019. REUTERS / Angus Mordant / File Photo

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  • US crude inventories drop more than expected, demand increases
  • US Federal Reserve optimism boosts risk appetite
  • Britain and South Africa show biggest increase in daily COVID-19 cases

LONDON, Dec. 16 (Reuters) – Oil hit $ 75 on Thursday, supported by record implied demand from the United States and falling crude inventories, even as the spread of the Omicron coronavirus variant threatens to dampen consumption global.

Crude and other risky assets such as stocks also received a boost after the US Federal Reserve announced a bullish economic outlook, which boosted investor morale even as the Fed announced the long-awaited end of its monetary stimulus.

Brent crude oil rose 62 cents, or 0.8%, to $ 74.50 a barrel at 9:15 a.m. GMT, while US West Texas Intermediate (WTI) crude rose 65 cents, or 0.9%, to $ 71.52.

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Despite the current wave of the virus, the EIA’s weekly oil inventory report showed that demand for petroleum products has reached an all-time high, crude exports have rebounded, and domestic crude inventories have shown a larger circulation. larger than expected, ”said Edward Moya, senior analyst at OANDA.

The United States’ Energy Information Administration (EIA) said on Wednesday that crude inventories fell 4.6 million barrels, more than analysts had expected.

Demand for oil recovered in 2021 after last year’s collapse, and the EIA also said that product supplied by refineries, a gauge of demand, jumped in the week most recent to reach 23.2 million barrels per day (bpd).

“These figures suggest a healthy economic environment,” said Tamas Varga of oil broker PVM.

“Although the Fed’s announcement triggered a rise in oil and equity prices, the withdrawal of economic support and the Omicron crisis are the two main headwinds the oil market is currently facing,” he said. -he adds.

Concerns over the virus limited the gains. Britain and South Africa have reported record daily cases of COVID-19 as many companies around the world have asked their employees to work from home, which could limit demand in the future. Read more

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Reporting by Jessica Jaganathan; edited by Tom Hogue and Jason Neely

Our Standards: Thomson Reuters Trust Principles.

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