Title: Oil prices climb towards $80 on tight supply, stocks fall

Dec 29, 2021 06:25AM ET

By: AnalysisWatch

Oil prices neared $80 a barrel on Wednesday as global supply outages and falling US inventories offset worries that rising coronavirus cases could reduce demand.

Brent crude rose as high as $79.20 a barrel at 1055 GMT before pulling back to settle at $78.94 a barrel at 1055 GMT. The US West Texas Intermediate (WTI) fell 13 cents to $75.85 a barrel, after earlier rising to $76.17.

Both contracts are trading near their highest levels in a month, helped by strength in global equities.

Crude oil inventories in the United States fell by 3.1 million barrels in the week ending December 24, according to market sources late Tuesday, matching the expectations of nine analysts polled by Reuters.

Weekly data from the U.S. Energy Information Administration is due later on Wednesday.

Oil prices were supported by Ecuador, Libya, and Nigeria declaring parts of their oil production this month to be force majeure due to maintenance problems and oil field shutdowns.

Russian Deputy Prime Minister Alexander Novak said OPEC+ had resisted Washington's calls to increase output because it wanted to give clear guidance to the market and not deviate from its policy of gradually increasing production.

Investors are looking forward to the OPEC+ meeting on January 4, when the alliance will decide whether to continue its planned 400 000 barrels per day increase in February.

At its last meeting, OPEC+ stuck to its plans to increase production in January, despite Omicron.