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After a two-day rally, oil prices leveled off after an industry report showed the largest increase in US crude stockpiles at Cushing since February. In New York, futures were trading around $72 per barrel.
According to people familiar with the figures, the American Petroleum reported last week that inventories at the key storage hub increased by 2.4 million barrels.
If confirmed by government data due later Wednesday, this would be the fourth weekly gain and the largest increase since the week ended Feb. 19.
Crude has risen more than 8% in the last two sessions, outperforming other financial assets, on growing evidence that the omicron virus variant will not derail the global economic recovery.
So far, there have been few deaths as a result of the new strain, and there is no indication that it will have a significant impact on oil demand.
The API reported that crude inventories in the United States fell by 3.1 million barrels last week. If confirmed by the Energy Information Administration, it would be the largest draw since September. According to the median estimate in a Bloomberg survey, the EIA will report that stockpiles have decreased by 1.5 million barrels.
Over the last week, some traders have bet on the remote possibility that WTI’s discount to Brent will exceed $10 per barrel next year.
The long-shot wager indicates that some market participants believe the Biden administration will intervene in the market again to lower prices following a pledge to sell crude inventories from strategic reserves.
Story by : Norvisi Mawunyegah