U.S. commercial crude oil inventories fell last week International oil prices rose on January 5

As U.
S.
commercial crude oil inventories fell last week and the market continued to digest OPEC's latest production policy, international crude oil futures prices closed higher
on the 5th.

Light crude futures for February 2022 delivery rose $0.
86, or 1.
12%,
to settle at $77.
85 a barrel on the New York Mercantile Exchange by the close of the day.
London Brent crude futures for March 2022 delivery rose $0.
80, or 1%, to settle at $80.
80 a barrel
.

According to data released by the US Energy Information Administration on the 5th, US commercial crude oil inventories last week were 417.
9 million barrels, down 2.
1 million barrels
from the previous month.
However, U.
S.
motor gasoline and distillate inventories rose by 10.
1 million barrels and 4.
4 million barrels, respectively, last week, while propane and propylene inventories fell by 700,000 barrels
month-on-month.
Including commercial crude, refined products, propane and propylene, U.
S.
commercial oil inventories rose significantly by 10.
2 million barrels
month-on-month last week.

The data also showed that U.
S.
refineries processed an average of 15.
9 million barrels per day last week, an increase of 163,000 barrels month-on-month; the average operating rate of U.
S.
refineries last week was 89.
8%, up from 89.
7% the previous week; U.
S.
net crude imports averaged 3.
33 million barrels per day last week, down 500,000 barrels
month-on-month.

It is worth noting that commercial crude oil inventories in the Cushing region of the United States last week were 37.
3 million barrels, a significant increase of 2.
6 million barrels month-on-month; U.
S.
strategic crude reserves fell 1.
346 million barrels month-on-month to 593.
6 million barrels last week, while U.
S.
crude oil production averaged 11.
8 million barrels per day last week, unchanged
month-on-month.

Data released by the American Petroleum Institute late on the 4th showed that U.
S.
commercial crude oil inventories fell by 6.
43 million barrels month-on-month last week, while gasoline and distillate inventories increased by 7.
061 million barrels and 4.
34 million barrels
, respectively.

Phil Flynn, senior market analyst at U.
S.
Price Futures Group, said on the 5th that the sharp increase in U.
S.
gasoline inventories last week was more related to tax considerations at the end of the year than actual supply and demand
.

Tariq Zahir, head of Tyche Capital Advisors, said that while commercial crude inventories fell slightly less than expected last week, the month-on-month increase in commercial crude inventories in the rising gasoline Cocushing region was eye-opening
.
At this time of year, crude oil inventories typically fall for tax considerations, while refined product inventories increase
.

Caroline Bain, chief commodities economist at Capital Economics, said the sharp decline in implied oil demand, particularly gasoline, showed the public was wary
of travel amid the spread of the Omicron variant.
These concerns are likely to persist
in the coming weeks.

Flynn believes that while oil prices will face resistance if they continue to rise, if New York crude futures can break above $77 a barrel, it should accelerate the rise
.

Barclays analysts said that although OPEC+ announced on the 4th that it would continue to raise the average crude oil production quota by 400,000 barrels per day in February, oil producers are likely to struggle to meet this production target, and countries such as Nigeria, Angola and Libya face difficulties
in increasing production.

Barclays said OPEC+ has chosen the path of least political resistance and continues to raise crude oil production quotas on a monthly basis, but the actual production increase is likely to be much smaller than the quota increase, similar
to the smaller impact of the Omicron variant on demand.
Brent crude futures are expected to average $80 per barrel in 2022
.