US reserves decline more steeply than expected, with heating oil demand growing as snowstorms spread
22 December 2022 - 14:15
byShadia Nasralla
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Jet fuel consumption is expected to pick up with a post-Covid boom in US travel for the end-of-year holiday season. Picture: BLOOMBERG/DAVID RYDER
London — Oil prices climbed for a fourth straight day on Thursday with US crude, heating oil and jet fuel stocks growing tighter just as a wintry blast hits the US.
Brent crude futures gained $0.74, or 0.9%, to trade at $82.94 at 0911 GMT, extending gains of around 2.7% from the previous session.
US West Texas Intermediate (WTI) crude futures, hitting their highest since December 5 earlier, were up $0.81, or 1%, at $79.10 a barrel.
Both benchmark contracts jumped on Wednesday after government data showed US crude inventories fell by much more than analysts had expected, posting a drop of 5.89-million barrels for the week ending on December 16.
Distillate stocks, which include heating oil and jet fuel, also declined, going against expectations for a build, in what PVM analyst Stephen Brennock called “an overwhelmingly price-supportive stock report from the Energy Information Administration”.
The falling stockpiles come as demand for heating oil is set to soar with a powerful winter storm hitting the US, with sub-zero wind chills expected as far south as Texas and record-breaking lows forecast for Florida and eastern states.
Jet fuel consumption is also expected to pick up with a post-Covid boom in travel for the end-of-year holiday season, though transport fuel demand might be reduced if the storm keeps people from travelling.
Demand worries, however, stemming from China's Covid-19 surge and fears of a global recession may keep oil futures in check.
China may be struggling to keep an accurate count of Covid infections as it experiences a big spike in cases, a senior World Health Organisation official said on Wednesday, amid concerns about a lack of data from the country.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil rises on tight US stocks as winter blast hits
US reserves decline more steeply than expected, with heating oil demand growing as snowstorms spread
London — Oil prices climbed for a fourth straight day on Thursday with US crude, heating oil and jet fuel stocks growing tighter just as a wintry blast hits the US.
Brent crude futures gained $0.74, or 0.9%, to trade at $82.94 at 0911 GMT, extending gains of around 2.7% from the previous session.
US West Texas Intermediate (WTI) crude futures, hitting their highest since December 5 earlier, were up $0.81, or 1%, at $79.10 a barrel.
Both benchmark contracts jumped on Wednesday after government data showed US crude inventories fell by much more than analysts had expected, posting a drop of 5.89-million barrels for the week ending on December 16.
Distillate stocks, which include heating oil and jet fuel, also declined, going against expectations for a build, in what PVM analyst Stephen Brennock called “an overwhelmingly price-supportive stock report from the Energy Information Administration”.
The falling stockpiles come as demand for heating oil is set to soar with a powerful winter storm hitting the US, with sub-zero wind chills expected as far south as Texas and record-breaking lows forecast for Florida and eastern states.
Jet fuel consumption is also expected to pick up with a post-Covid boom in travel for the end-of-year holiday season, though transport fuel demand might be reduced if the storm keeps people from travelling.
Demand worries, however, stemming from China's Covid-19 surge and fears of a global recession may keep oil futures in check.
China may be struggling to keep an accurate count of Covid infections as it experiences a big spike in cases, a senior World Health Organisation official said on Wednesday, amid concerns about a lack of data from the country.
Reuters
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