MOSCOW (MRC) - Oil slipped on Thursday as investors took profitsfollowing a month-long rally in prices, but strong demand and short-term supply disruptions continue to support prices close to their highest levels since late 2014, reported Reuters.
Brent crude futures fell 49 cents, or 0.6%, to USD87.95 a barrel as of 0740 GMT, after falling more than USD1 earlier. The global benchmark rose to USD89.17 a barrel on Wednesday, its highest since October 2014.
US West Texas Intermediate (WTI) crude futures for February delivery were down 6 cents, or 0.1%, at USD86.90 a barrel, after dropping nearly USD1 earlier. WTI climbed to as much as USD87.91 on Wednesday, the highest since October 2014.
The February WTI contract will expire on Thursday and the most-actively traded contract, for March delivery, is at USD85.41 a barrel, down 0.5%.
"The International Energy Agency said global oil demand is on track to hit pre-pandemic levels," analysts at ANZ bank said in a note.
"Shorter-term supply disruptions are also helping tighten markets. Brent crude rallied sharply after reports a key oil pipeline running from Iraq to Turkey was knocked out by an explosion."
However, the flow of crude oil through the Kirkuk-Ceyhan pipeline has resumed, after it was halted on Tuesday due to a blast near the pipeline in the southeastern Turkish province of Kahramanmaras, officials said on Wednesday.
Supply concerns have mounted this week after Yemen's Houthi group attacked the United Arab Emirates, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC). Meanwhile Russia, the world's second-largest oil producer, has built up a large troop presence near Ukraine's border, stoking fears of invasion and subsequent supply uncertainties.
Underpinning oil prices is the broad post-coronavirus pandemic recovery in demand for fuel.
OPEC officials and analysts say that an oil rally may continue in the next few months, and prices could top USD100 a barrel as demand shrugs of the spread of the Omicron COVID-19 variant.
OPEC+, which groups the cartel with Russia and other producers, is struggling to hit a monthly output increase target of 400,000 barrels per day (bpd).
US crude and gasoline stocks rose while distillate inventories fell last week, according to market sources citing American Petroleum Institute figures on Wednesday. Crude stocks rose by 1.4 million barrels for the week ended Jan. 14. Gasoline inventories rose by 3.5 million barrels while distillate stocks fell by 1.2 million barrels, according to the sources, who spoke on condition of anonymity.
As MRC informed before, US commercial crude stocks fell 3.48 million barrels to 413.96 million barrels in the week ended Sept. 17, to more than 8% below the five-year average, Energy Information Administration data showed. Stocks were last lower Oct. 5, 2018.
We remind that in late August, 2021, US crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said. Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.
We also remind that US crude oil production was expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, EIA said in a monthly report earlier last year, a smaller decline than its previous forecast for a drop of 210,000 bpd.