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Highlights
- Crude oil prices rose on Wednesday.
- A weaker dollar also helped to boost oil prices.
- The US crude inventories have tumbled for the seventh consecutive week.
Crude oil prices rose nearly 2% on Wednesday to hit two-month highs on tight supplies as inventories in the US tumbled to their lowest since 2018. A weaker dollar also buoyed the prices as worries regarding the Omicron variant eased.
March delivery Brent Crude oil futures last traded at US$84.84 per barrel up 0.11%, whereas February delivery WTI crude oil futures traded 0.12% up at US$82.74 per barrel as of 13 January 2022 at 11:17 AM AEDT.
Falling crude inventories
As per the Energy Information Administration (EIA), US crude inventories tumbled 4.6 million barrels in the last week to 413.3 million barrels to reach their lowest level since October 2018.
A falling dollar also helped boost crude oil prices as the weaker greenback makes oil cheaper for other currency holders. The dollar dropped to a two-month low against a basket of currencies following the US consumer price data showing prices rose significantly in December.
Source: © Tebnad | Megapixl.com
The US crude inventories have tumbled for the seventh consecutive week. Additionally, the global inventories are also falling as major oil producers are struggling to increase their output despite the rise in demand amid rising concerns of Omicron cases.
OPEC and its allies, together known as OPEC+, are still holding back more than 3Mbpd in output, whereas US sanctions pin back supply from Iran.
Bottom Line
Crude oil prices hit two-month highs on Wednesday due to falling inventories in the US and a drop in the US dollar.