By Adedapo Adesanya
The prices of crude oil moved in different directions on Friday, December 27, on the back of several factors, with the main being data showing that crude inventories in the United States fell more than expected.
On Friday (9 p.m. Nigerian time}, the Brent Crude traded higher at $66.79 per barrel after rising by 3 cents equivalent to 0.04 percent, while the United States West Texas Intermediate (WTI) traded down at $61.65 after losing 3 cents or 0.05 percent.
According to data by the Energy Information Administration (EIA), US crude inventories stocks dropped by 5.5 million barrels in the week ended December 20 to 441.4 million as against the expected 1.7 million barrels.
There were also considerations that oil prices were pressured by end of the year sentimental sales as it is always been during the festive periods.
Another support to oil prices was data from the Chinese National Bureau of Statistics showing that the nation’s industrial firms made more profits for the first time in eight months in November. Sectors like the chemical, petroleum processing, and steel industries reported recovering profits last month due to better market demand and rise in prices as the US-China eased.
Oil prices still remain backed by continuous trade agreement between the United States and China, following announcement by President Donald Trump that he and his counterpart would sign the phase one part of the deal to reduce tariffs and also bring about purchase of American products.
There is also the decision by the Organisation of the Petroleum Exporting Countries (OPEC) and its allies called OPEC+ led by Russia to support oil prices and reduce possible oil glut until March 2020 but according to the Russian Energy Minister, Alexander Novak, the alliance may consider wrapping up production cuts in 2020.
The OPEC+ has been cutting its supplies since 2017 in order to balance out the supply and demand on the global market but with Non -OPEC producers such as the United States, Brazil, Norway, and Guyana coming into the market stronger next year, this is set to upset the plans and this might see plunges in oil prices.
