Oil prices lost ground on Thursday, dropping more than $1 a barrel from their highest levels in more than a month after rising fuel stockpiles and lower demand in the US.
Global benchmark Brent crude futures fell $1.12 a barrel, or 1.40%, to $79.68 as of 0423 GMT. West Texas Intermediate (WTI) crude futures fell $1.04, or 1.3%, to $76.81 a barrel.
U.S. crude stockpiles fell last week, while gasoline inventories rose more than 10 million barrels, the biggest weekly increase since April 2020, as supply increased at refineries amid reduced fuel demand.
The spread of the Omicron variant is breaking global records with no signs of slowing down.
The decline in gasoline demand indicates that the public is cautious about travel following the increasing cases of the Omicron variant. These fears are very likely to continue for a few more weeks.
Also, after the US Federal Reserve meeting, which signaled that policy makers could raise interest rates faster than the markets anticipated, more risky assets such as oil were weighed down.
OPEC+ agreed on Tuesday to add an additional 400,000 barrels per day (bpd) in February, as it has done every month since August. It is assumed that the alliance will completely phase out the remaining 2.96 million barrels of oil production cut by September 2022.
On Wednesday, Brent and WTI futures climbed to their highest level since late November as OPEC+’s decision to raise supplies will not cause major oversupply concerns in the first quarter.