Traders bet on a recovery in demand, with U.S. crude hitting a more than one-month high above the 76 mark

On Tuesday (Dec.
28), crude oil rose $0.
65, or 0.
83%, to $78.
87 a barrel
in late trading.
Production in several oil-producing countries was disrupted
due to maintenance issues and field closures.
Meanwhile, API data earlier showed crude inventories fell by 3.
091 million barrels in the week ended Dec.
24, the fifth consecutive weekly decline, gasoline inventories fell by 319,000 barrels and refined oil inventories fell by 716,000 barrels, supporting oil prices
.

Both crude oil contracts hit one-month highs, helped by the strength of U.
S.
equities
.
Jim Ritterbusch, president of Ritterbusch and Associates LLC, said: "The stock market seems set to reach or near record highs by the end of the year, which could easily spill over into the oil market and push crude oil prices
higher.
" ”

The Centers for Disease Control and Prevention (CDC) Nowcast model showed on Tuesday that omicron accounted for 58.
6 percent of U.
S.
genetically sequenced coronavirus cases in the week ended Dec.
25, and the new week's data showed that the CDC made a major adjustment to its previous estimates, when it thought the proportion of the omicron variant suddenly increased to 73 percent from 3 percent
a week ago.

There are growing signs that omicron has milder symptoms than previous generations of strains, the United States has cut the quarantine time for infected people in half, and the United Kingdom has ruled out the introduction of
more restrictions before the new year.
Phil Flynn, senior market analyst at Price Futures Group Inc.
, said concerns about lockdowns and restrictions on economic activity are waning
.

GIOVANNI Staunovo, oil analyst at UBS, said: "Production disruptions in Ecuador, Libya and Nigeria, as well as expectations that US crude inventories will fall sharply again, also provided support
.
Due to maintenance issues and field closures, the three producers declared force majeure on some oil production this month
.
The U.
S.
Commodity Futures Trading Commission said on Monday that fund managers added to their net long positions
in U.
S.
crude oil futures and options in the week ended Dec.
21.
Speculators raised their combined futures and options positions in New York and London by 4,634 to 259093 during
the week.

The recovery in crude oil prices pushed benchmark U.
S
.
crude futures to their biggest annual gain in more than a decade.
In addition, soaring natural gas prices have also stimulated demand for petroleum products, while OPEC+ production has continued at a slight gradual pace
.
Investors are awaiting the Jan.
4 meeting of the OPEC+ alliance of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, at which it will decide whether to increase output by 400,000 b/d
as planned in February.

However, it should be noted that as of 5:22 a.
m.
Beijing time on December 29, there were more than 540,000 new confirmed cases of new coronary pneumonia and more than 3,000 new deaths in the United States in a single day, and the surge in confirmed cases may bring risks
to crude oil demand.
A CDC spokesperson said that the emergence of more data has led the CDC to lower its estimate of omicron percentage, but the CDC still believes that the incidence of omicron infections is steadily increasing
.