By Adedapo Adesanya
Crude prices were bullish on Wednesday morning as data from the Energy Information Administration (EIA) showed an inventory draw of 4.7 million barrels for the week to December 17.
Brent crude gained 43 cents or 0.57 per cent to trade at $75.72 per barrel while the United States West Texas Intermediate (WTI) crude rose 36 cents or 0.49 per cent to sell at $73.12 per barrel
At 423.6 million barrels, crude oil inventories remain 8 per cent below the five-year average—compared to 7 per cent below the five-year average last week.
Last week’s draw adds to last week’s huge draw of 4.6 million barrels from crude oil inventories.
On its part, the American Petroleum Institute estimated a crude oil inventory draw of 3.670 million barrels for the week to December 17.
Oil prices have been pressured by pandemic concerns courtesy of the Omicron variant that has triggered another round of restrictions in certain countries.
Germany, Ireland, the Netherlands and South Korea are among countries that have reimposed partial or full lockdowns or other social distancing measures in recent days.
However, since there is no universal agreement on the nature of the variant, it is still unclear whether the Omicron variant is more deadly than Delta, the strain which has been dominant in recent months.
A study from South Africa suggested the virus was less likely to send people to the hospital than Delta as governments worldwide try to contain the rapid spread of the variant with the World Health Organization (WHO) saying the Omicron variant was spreading at an unprecedented rate.
On the vaccine front, Moderna said on Tuesday it does not expect any problems in developing a booster shot to protect against the Omicron variant.
Pfizer, on its part, said its antiviral COVID-19 pill was approved for at-home use. It targets people who have contracted the virus and is effective at reducing symptoms and hospitalizations.
Amid these, oil demand forecasts have been revised downward with the International Energy Agency (IEA) lowering its forecast for oil demand this year and the next by 100,000 barrels per day each, mostly because of the expected blow to jet fuel use from new travel curbs.
The Asian Development Bank trimmed its growth forecasts for developing Asia for this year and next to reflect risks and uncertainty brought on by the variant, which could also hamper oil demand.
However, the Organisation of the Petroleum Exporting Countries (OPEC) remained positive as it raised its world oil demand forecast for the first quarter of 2022 and stuck to its timeline for a return to pre-pandemic levels of oil use, saying the Omicron variant’s impact would be mild and brief.
Dipo Olowookere