Holiday boom. Crude oil prices gain as US inventories decline

Crude oil traded higher on Thursday morning following a decline in the crude oil inventories in the US.

At 10 am on Thursday, February Brent oil futures were at $82.63, up by 0.52 per cent, and February crude oil futures on WTI were at $78.78, up by 0.63 per cent.

January crude oil futures were trading at ₹6,532 on Multi Commodity Exchange (MCX) in the initial trading hour against the previous close of ₹6,506, up by 0.40 per cent, and February futures were trading at ₹6,560 against the previous close of ₹6532, up by 0.43 per cent.

7% below 5-year average

The US petroleum status report for the week ending December 16, which was released by US EIA (Energy Information Administration) on December 21, showed a decline in the US’s crude oil inventories.

According to the report, US commercial crude oil inventories (excluding those in the strategic petroleum reserve) decreased by 5.9 million barrels from the previous week. At 418.2 million barrels, US crude oil inventories were about 7 per cent below the five-year average for this time of year.

The US distillate fuel inventories, including heating oil and jet fuel, decreased by 0.2 million barrels last week. The stock was about 7 per cent below the five-year average for this time of year.

Reports said the demand for heating oil is likely to go up with a powerful winter storm expected to hit the US. This storm is expected to bring sub-zero wind chills to some parts of the US. Market reports said that the year-end holiday boom is likely to boost the consumption of jet fuel in the US.

US crude oil refinery inputs averaged 16 million barrels a day during the week ending December 16, which was 150,000 barrels a day less than the previous week’s average. Refineries operated at 90.9 per cent of their operable capacity last week. Gasoline production increased last week, averaging 9.6 million barrels a day, the report said.

China, which is a major importer of crude oil, has been witnessing a surge in the number of Covid cases. Market reports noted that the near-term outlook for the crude oil demand for China remains uncertain at this point of time.

Guar gum, dhaniya turn hot

January natural gas futures were trading at ₹456.30 on MCX in the initial trading hours against the previous close of ₹443.80, up by 2.82 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), January guar gum contracts were trading at ₹12,300 in early trade against the previous close of ₹12,154, up by 1.20 per cent.

January dhaniya futures were trading at ₹8,200 on NCDEX against the previous close of ₹8,074, up by 1.56 per cent.

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