# Oil prices stay firm on fuel demand despite COVID-19 surge
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-12-30
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: Oil Prices Rise on Strong U.S. Fuel Demand Despite Omicron
Meta Description: Oil prices climb as U.S. fuel demand stays robust despite Omicron wave, supported by falling inventories and government measures.
URL: https://financedigest.com/oil-prices-stay-firm-on-fuel-demand-despite-covid-19-surgehtml

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By Florence Tan and Sonali Paul

SINGAPORE (Reuters) -Oil prices rose on Thursday to extend several consecutive days of gains, buoyed by data showing U.S. fuel [demand holding](https://www.financedigest.com/ibm-beats-first-quarter-profit-estimates-signals-demand-holding-up.html "IBM beats first-quarter profit estimates, signals demand holding up") up well despite soaring Omicron coronavirus infections.

Brent crude futures rose 24 cents, or 0.3%, to $79.47 a barrel at 0502 GMT, up for a fourth day. U.S. West Texas Intermediate (WTI) crude futures rose 26 cents, or 0.3%, to $76.82 a barrel for a seventh session of gains.

Oil [prices edged higher overnight thanks to larger-than-expected falls](https://www.financedigest.com/buy-off-plan-to-beat-stalling-house-prices-and-falling-rental-yields-says-jean-liggett.html "“Buy off-plan to beat stalling house prices and falling rental yields” says Jean Liggett ") in U.S. crude and gasoline inventories and receding virus nerves,” Jeffrey Halley, senior [market analyst at brokerage OANDA said in a note](https://www.financedigest.com/the-chelated-iron-agricultural-micronutrient-market-to-escalate-on-a-holistic-note.html "The Chelated-Iron Agricultural Micronutrient Market To Escalate On A Holistic Note").

U.S. Energy Information Administration [data on Wednesday showed crude oil](https://www.financedigest.com/oil-jumps-on-lower-than-expected-us-inflation-data.html "Oil jumps on lower-than-expected US inflation data") inventories fell by 3.6 million barrels in the week to Dec. 24, which was more than what analysts [polled by Reuters](https://www.financedigest.com/bank-of-england-to-raise-rates-by-50bps-again-to-tame-inflation-reuters-poll.html "Bank of England to raise rates by 50bps again to tame inflation: Reuters Poll") had expected. \[EIA/S\]

Gasoline and distillate inventories also fell, versus analysts’ forecasts for builds, indicating [demand remains strong despite record](https://www.financedigest.com/oil-gains-after-iea-sees-demand-rising-to-record-high.html "Oil gains after IEA sees demand rising to record high") COVID-19 cases in the United States.

Oil prices also drew support from steps taken by governments to limit the impact of record high COVID-19 cases on economic growth, such as easing testing rules and narrowing who needs to isolate as close contacts of [positive cases](https://www.financedigest.com/italy-probes-meta-over-abuse-of-position-in-music-rights-case.html "Italy probes Meta over abuse of position in music rights case").

The Organization of the Petroleum Exporting Countries (OPEC) and their allies, a group known as OPEC+, will meet on Jan. 4 to decide whether they will [continue increasing](https://www.financedigest.com/multilocal-continues-hiring-spree-following-increasing-demand-for-its-services.html "multilocal continues hiring spree following increasing demand for its services") output in February.

Saudi Arabia’s [King Salman said on Wednesday the OPEC+ production agreement was “essential” to oil](https://www.financedigest.com/factbox-from-holy-oil-to-sceptres-and-a-spoon-king-charles-coronation-ceremony.html "Factbox-From holy oil to sceptres and a spoon: King Charles’ coronation ceremony") market stability and stressed the need for producers to comply with the pact.

Global oil prices have rebounded by 50% to 60% in 2021 as fuel demand roared back to near pre-pandemic [levels while deep production cuts by OPEC+ producers for most of the year](https://www.financedigest.com/2016-must-be-the-year-of-board-level-transparency-and-good-governance.html "2016 must be the year of board level transparency and good governance") erased a supply glut that has been weighing on the market.

China, the [world’s top](https://www.financedigest.com/top-10-fastest-bikes-in-the-world.html "Top 10 fastest bikes in the world") crude importer, has issued the first batch of 2022 import quotas to mostly independent refiners, totalling 109.03 million tonnes, 11% below the comparable year-earlier quota, industry sources said.

(Reporting by Sonali Paul and Florence Tan; editing by Richard Pullin and Himani Sarkar)


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