06.01.202212:10 Forex Analysis & Reviews: Why did oil prices drop yesterday?

Yesterday, crude oil prices slightly declined after the Energy Information Administration reported a 2.1 million barrel inventory reduction in the last week of 2021.

This is compared to the past week, when production was 3.6 million barrels, while the total volume remains below the average for this time of year.

In regard to gasoline, EIA said that gasoline reserves for the week up to December 31, 2021, amounted to 10.1 million barrels. This is compared to the 1.5 barrels deficit in the previous New Year's week.

Last week, gasoline production averaged 8.5 million barrels per day compared to 10.1 million barrels per day a week earlier.

During the final week of 2021, stocks of middle distillates rose by 4.4 million barrels, compared to the decline of 1.7 million barrels in the previous week.

Refineries also processed 15.9 barrels of oil a day last week, operating at 89.8% of their capacity. Imports amounted to 5.9 million barrels per day.

Earlier this week, OPEC+ announced that it would add another 400,000 barrels per day to total production next month, which reaffirmed its confidence that demand for crude oil will remain high this year, despite concerns about the Omicron strain.

Anyhow, those fears seem to be fading, despite the recorded number of cases. The United States broke all records on Monday, registering 1 million cases. However, the hospitalization rate with the new option is indeed lower, which gives cause for moderate optimism.