US oil demand hits record highs, adding to inflation surge

Oil prices continued to rise on Thursday as US demand hit record levels.

At 2:00 p.m. EDT (UTC-5) West Texas Intermediate on the New York Stock Exchange was selling at $ 72.50 a barrel, up 1.76%.

The four-week average oil demand hits an all-time high of 23.2 million barrels per day, about 20% above 2020 levels, meaning increased consumption of gasoline, diesel and other refined fuels, analysts said.

Analysts wrote that the surge in demand was due to more people traveling this holiday season and an increase in the number of trucks on highways delivering products.

Crude stocks are falling

The US Energy Information Administration published its weekly figures on Wednesday show crude exports are returning to normal and a larger-than-expected draw on domestic crude stocks.

U.S. crude inventories fell 4.6 million barrels in the week to December 10, according to EIA data, more than double the 2.1 million barrel drop predicted by the U.S. analysts.

Refinery production reached 23.2 million barrels per day, mainly due to an increase in the production of gasoline, diesel and other refined fuels.

Meanwhile, analysts said the Federal Reserve’s Federal Open Market Committee decision on Wednesday to end its purchases of Covid-era bonds in March and start raising interest rates in 2022 n ‘is unlikely to affect continued demand for petroleum products.

Covid blocks price gains

On the other hand, concerns over the latest variant of the coronavirus have put downward pressure on oil prices, analysts say.

Omicron would quickly spread to the UK and South Africa. Companies around the world are once again requiring their employees to work remotely, which could lower the demand for oil.

“The trauma remains”

Commerzbank energy analyst Barbara Lambrecht said in an email that “trauma lurks” for the oil industry.

His prediction is that demand for oil will increase sharply, no further oil reserves are likely to be released, and the excess supply is expected to be significantly lower. .

Read more: Energy commodities rally after Fed announcement

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