Oil prices in a new jump 2021-01-03T11:42:51 Oil prices in a new jump after the drop in US crude oil inventories Oil prices in a new jump : The American Petroleum Institute (API) announced on Tuesday, December 29, 2020, a decrease of 4.785 million barrels of crude oil in US crude oil inventories for the week ending December 25. This happened after an increase of 2.700 million barrels in crude oil inventories for the previous week ending December 18th, while the US Energy Information Administration announced a decrease of 0.6 million barrels in the same period. Gasoline Inventories fell by 131,000 barrels, and distillate fell by 1.88 million barrels, easing concerns about the outlook for energy demand amid a new strain of Coronavirus that is likely to further restrict international travel. In the other hand, analysts also expected the official government report on Wednesday to show that weekly US crude supplies fell by 2.6 million barrels. In the previous week, the American Petroleum Institute announced an increase in oil inventories by 2.70 million barrels, after analysts had expected to withdraw 3.135 million barrels. The changes in the oil price Oil prices rose ahead of the release of data on Tuesday, optimistic about the stimulus for the United States to increase aid payments to tackle the epidemic signed by President Donald Trump and the Congress on Monday, as the move is supposed to help increase the demand and encourage investors to take more risks in the time that hold hope of strengthening Economic growth. However, the gains are still limited as a result of OPEC’s plan to gradually increase oil production at the beginning of the New Year despite closures and reduced demand. Ahead of the American Petroleum Institute data release on Tuesday, the price of WTI rose $ 0.41 (+ 0.86%) to $ 48.03, up $ 0.8 a barrel over the week. Brent crude oil index also rose by $0.44 at the time (+ 0.87%) to $ 51.30 – up nearly $ 1 a barrel over the week. At 4:36 PM on Tuesday, the WTI was trading at $ 47.99, while Brent crude was trading at $ 51.07. US West Texas Intermediate (WTI) crude futures for February closed 38 cents, or 0.8%, higher at $ 48.00 a barrel on the New York Mercantile Exchange. Brent crude futures for February settled 23 cents, or 0.5%, up at $ 51.09 a barrel on the London Futures Exchange. Weekly energy production rates According to the Energy Information Administration – US oil production was flat at 11.0 million barrels per day for the week ending December 18 – that’s 2.1 million barrels per day lower than an all-time high of 13.1 million barrels per day in March. The American Petroleum Institute also announced that gasoline inventories decreased by 718,000 barrels of gasoline for the week ending December 25 – compared to the previous week’s decline of 224,000 barrels. While analysts had expected an increase of 1.778 million barrels this week. Distillate inventories decreased by 1.877 million barrels for the week, compared to last week’s increase by 1.03 million barrels, and Cushing inventories increased this week by 131,000 barrels. The impact of recent decisions on the oil market Oil prices jumped on Tuesday after the Democratic-led US House of Representatives voted on Monday to fulfill President Donald Trump’s request to pay Americans $ 2,000 for coronavirus relief operations, which contributed to an increase in oil demand. But concerns about coronavirus lockdowns continued to curb gains in the short term. And in accordance with the decisions of the previous meeting of OPEC + (the Organization of the Petroleum Exporting Countries and Russia), which would have reduced record oil production cuts this year to support the market. The group is set to increase production by 500,000 barrels per day in January, and Russia supports another increase by the same amount in February, with this increase continuing until April. The decision was seen as a compromise between the more aggressive backers of deeper cuts such as Saudi Arabia and those eager to resume production growth such as Iraq and Russia. The news of the OPEC + decision was welcomed by traders who were already optimistic about a recovery in demand thanks to the positive vaccine news. Oil prices recovered some of their losses since the start of the epidemic on the back of this positive news and remained high even after OPEC lowered its demand forecast for 2021. According to Russian Federal Customs data, citing domestic shipping analysis outlet SeaNews, Russian crude oil exports fell 10.4% in volume year-on-year in the January-October period, due to lower demand and the OPEC + deal. The value of Russia’s exports of crude oil decreased by more than 40% in the same period due to lower oil prices compared to its average price in the first ten months of 2019. The value of Russian crude oil exports decreased by 40.6% between January and October 2020, and its value reached 60.326 billion US dollars, according to data from the Russian Federal Customs Service. In October 2020 alone, the amount of Russian crude oil exports decreased by 25.3% compared to October 2019, and decreased by 0.9% compared to September 2020. The value of Russian crude exports decreased by 51.9% annually in October, as the value of exports was 5.13 billion US dollars. The new strain of Covid – 19 and developments in oil prices The new strain of Coronavirus has caused movement restrictions to be re-imposed within the United Kingdom, which led to a decline in demand in the near term and negatively affected prices, while hospital admissions and infections increased in parts of Europe and Africa. But there is positive news that oil prices may gain strength with the increase in vaccination programs around the world next year. As optimism about vaccines has the potential to overcome fears about the Coronavirus. The US Commodity Futures Trading Commission said Monday that traders raised their net US crude futures and options in the week ending December 21.