• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 5 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 days Does Toyota Know Something That We Don’t?
  • 6 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 3 days World could get rid of Putin and Russia but nobody is bold enough
  • 2 days America should go after China but it should be done in a wise way.
  • 6 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 5 days China is using Chinese Names of Cities on their Border with Russia.
  • 6 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 5 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 6 days Putin and Xi Bet on the Global South
  • 6 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 7 days United States LNG Exports Reach Third Place
  • 7 days Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 11 days huge-deposit-of-natural-hydrogen-gas-detected-deep-in-albanian-mine
U.S. Oil Drilling Activity Stalls

U.S. Oil Drilling Activity Stalls

The total number of active…

Venezuela’s Oil Output Could See Moderate Boost

Venezuela’s Oil Output Could See Moderate Boost

The unlikely return of full…

Major Oil Companies Make Moves in Megamerger Frenzy

Major Oil Companies Make Moves in Megamerger Frenzy

Several high-profile mergers among oil…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Oil Prices Inch Higher Despite Large Gasoline Build

Crude prices dipped slightly before jumping again after the Energy Information Administration reported an inventory decline of 4.6 million barrels for the week to January 7.

The inventory change followed an estimated 2.1-million-barrel decline for the previous week.

In fuels, however, the EIA reported builds across the board.

Gasoline inventories added 8 million barrels in the first week of the new year, compared with a hefty build of 10.1 million barrels for the previous week.

Gasoline production averaged 8.6 million bpd, which compared with 8.5 million bpd in the previous week.

In middle distillates, the EIA estimated an inventory increase of 2.5 million barrels for the first week of January, which compared with a build of 4.4 million barrels during the last week of December 2021.

Middle distillate production averaged 4.8 million bpd last week, compared with 5 million bpd in the previous week.

Refinery runs last week averaged 15.6 million bpd, which compared with 15.9 million bpd for the previous week. Imports averaged 6.1 million bpd, compared with 5.9 million bpd during the last week of 2021.

Oil prices meanwhile have been oscillating rapidly driven by production changes in Libya, fluctuating concern about the effect the Omicron variant will have on demand and OPEC’s melting spare production capacity.

At the time of writing Brent crude was trading at $84.28 per barrel and West Texas Intermediate was changing hands at $82.17 per barrel both up as tailwinds gained the upper hand temporarily. Among these was the change in attitude towards the latest coronavirus variant, with analyst joining OPEC in expecting the effect of the latest infection wave to be short-lived.

"Omicron has yet to wreak the havoc of the Delta variant and may never do so, keeping the global recovery on track," OANDA analyst Jeffrey Halley told Reuters.

Another reason for bullish price predictions has to do with OPEC’s dwindling spare capacity.

ADVERTISEMENT

"Combination of facts - that demand is going to be stronger than anticipated and that OPEC's supply may not grow as fast as the demand - is why prices are climbing," said Price Futures Group analyst Phil Flynn, as quoted by Reuters earlier this week.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Mamdouh Salameh on January 12 2022 said:
    Oil prices are responding to robust global economy and global oil demand in addition to declining global concerns about the impact of Omicron.

    However, question marks about OPEC+ spare production capacity are acting as a bullish factor pushing oil prices upward. Once OPEC+ has recovered all the production cuts it made in April 2020 at the height of the pandemic, it will end up with a spare capacity of no more than 2.0 million barrels a day (mbd) according to my estimates.

    It normally takes multi-billion investments and up to five years to expand production capacity by a meaningful margin. But with Saudi Arabia, Iraq, UAE, Russia and Kuwait embarking on capacity expansion, OPEC+ capacity could rise by an additional 2.20 mbd in five years’ time with Iraq contributing 700,000 barrels a day (b/d), UAE 450,000 b/d, Russia 400,000 b/d, Saudi Arabia 400,000 b/d and Kuwait 250,000 b/d.

    Therefore, I project higher crude oil prices for the next five years with Brent crude hitting $110-$120 a barrel by 2027.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News