Adedapo Adesanya
By Adedapo Adesanya
Oil prices ended higher on Tuesday as weather fears in the United States sparked concerns that millions might curb travel plans during the holiday season.
As a result, Brent crude futures grew by 19 cents or 0.2 per cent to $79.99 per barrel, and the US West Texas Intermediate (WTI) crude futures expanded by 90 cents to close at $76.09 per barrel.
According to the US National Weather Service, the Midwest and Great Lakes region could see a major blizzard beginning Thursday, while cold air moving east could bring a flash freeze causing a rapid temperature drop across the country.
Analysts warn that this could potentially disrupt travelling plans, which usually rise during the festive season.
Heavy snowfall could likely cause travel delays ahead of the Christmas holiday weekend, forecasters also said.
Prices were restricted on news that TC Energy Corp submitted its plan to restart the Keystone pipeline to US regulators, nearly two weeks after the 622,000 barrel-per-day pipeline ruptured in the worst oil spill in the United States in nine years.
Meanwhile, China has been relaxing pandemic restrictions, even as a surge in COVID-19 cases hurt the fuel demand outlook and fed uncertainty about the country’s economic recovery.
Cities across China have been racing to add hospital beds and build fever-screening clinics as international concern mounted that the world’s largest oil importer’s decision to dismantle its stringent zero-COVID regime could result in deaths and virus mutations.
Also, the US plans to buy up to 3 million barrels of oil for the Strategic Petroleum Reserve (SPR) after this year’s record release of 180 million barrels.
US crude oil stocks were expected to have dropped last week by about 200,000 barrels, while gasoline and distillates inventories were expected to be higher.
Crude oil inventories this week went back to draws, with the American Petroleum Institute (API) reporting inventories down by 3.069 million barrels more than analysts anticipated a 0.167 million barrel draw.
Meanwhile, crude stored in the nation’s Strategic Petroleum Reserves sunk by 211 million barrels, now at its lowest level since January 1984.
