Futures Movers: U.S. oil retreats, poised to snap 5-day streak of gains ahead U.S. inventory report

United States

Crude oil futures slipped on Wednesday, after five days of gains that took them to the highest levels since late November.

Investors were awaiting U.S. inventory data from the Energy Information Administration, which is scheduled to be released at 10:30 a.m. Eastern Time.

On Tuesday the American Petroleum Institute, a trade group, reported that U.S. crude-oil inventories fell 3.09 million barrels for the period ended Dec. 24, according to sources, and gasoline supplies declined by 319,000 barrels, as distillate stocks fell by 716,000 barrels. Crude supplies in Cushing, Okla., the New York Mercantile Exchange delivery hub, were seen increasing by 1.594 million barrels.

Reuters reported that force majeure declarations this month by Ecuador, Libya and Nigeria on some oil production due to maintenance issues has helped to support crude prices, despite the spread of the omicron variant of COVID.

Investors are also relieved that preliminary evidence suggests the omicron variant of COVID produces milder symptoms and won’t lead to harsh restrictions on commerce and travel.

Still, the World Health Organization has said the number of COVID-19 cases recorded world-wide increased by 11% last week compared with the previous week, with the biggest increase in the Americas.

Against that backdrop, oil may have some cause to edge back.

West Texas Intermediate crude for February delivery CLG22, -0.53% CL.1, -0.53% was trading 37 cents lower, or 0.5%, at $ 75.61 a barrel on the New York Mercantile Exchange, after the U.S. benchmark rose 0.5% on Tuesday to mark its highest settlement since Nov. 24.

February Brent crude BRNG22, -0.33%,  the global benchmark, shed 19 cents, or 0.2%, to trade at $ 78.47 a barrel on ICE Futures Europe, after rising 0.4% to the highest price since Nov. 25.

For the week, so far, WTI has risen 1.3% and Brent has climbed 3.5%, with both contracts heading for year-to-date gains of well over 51% after a rise in December of at least 13%, FactSet data show.

Meanwhile, OPEC+ will assess its plans to boost daily oil production among its members to 400,000 bpd starting in February or adjust its output to factor the spread of COVID. The Organization of the Petroleum Exporting Countries and its allies, including Russia, will meet on Jan. 4 to discuss global output strategy.

OPEC+ has resisted calls to boost output because it “wants to provide the market with clear guidance and not deviate from policy on gradual output increases, Reuters reported, citing Russian Deputy Prime Minister Alexander Novak.