WASHINGTON (Pakistan Point News / Sputnik - 23rd December, 2021) US gasoline stockpiles rose their most for a week since June, according to data from the Energy Information Administration (EIA) on Wednesday, indicating fuel demand was slumping from cutbacks in social activity triggered by the Omicron variant of the coronavirus.
Gasoline stockpiles rose by 5.53 million barrels during the week ended December 17, their most since a 7.5 million-barrel build during the week to June 7, the EIA's Weekly Petroleum Supply-Demand Report showed.
Industry analysts surveyed by US media had expected gasoline inventories to rise by just 65,000 barrels for the just-ended week, putting what the EIA reported at least eight times higher than projections. In the previous week, gasoline stockpiles drew down by 719,000 barrels.
The EIA report also showed that inventories of distillates, which are refined into diesel and jet fuel, among other fuel products, rose by 396,000 barrels last week versus a projected drop of 250,000. In the previous week, distillate stocks fell by 2.85 million.
Crude oil inventories, meanwhile, fell by 4.72 million barrels - versus a forecast decline of 2.5 million - and added to the 4.58-million slide in the previous week to Dec. 10.
But it was the build in gasoline - the United States' No. 1 automotive fuel - that caught the attention of many oil traders.
"It's quite shocking how much gasoline demand has cratered over the past week just as Omicron caseloads went through the roof," John Kilduff, founding partner at Again Capital, an energy hedge fund in New York, told Sputnik.
The Omicron is now the dominant coronavirus strain in the United States, accounting for more than 73% of new coronavirus cases last week, according to the Centers for Disease Control and Prevention. US cities like New York, Los Angeles and Chicago have announced mass cutbacks in activity and introduced various new restrictions in response.
Oil prices have fallen from the 2021 highs since the discovery of the Omicron variant in South Africa in November. The Brent global benchmark for crude fell from seven-year highs of $86.70 a barrel in mid-October to as low as $65.80 over the past two months, before settling into a range of between $70 and $75 now.
Despite the price slump and threats of a resurgence in the pandemic, global oil producers have so far played down risks from the Omicron.
OPEC+ - a 23-nation oil producing alliance led by the 13-member OPEC under Saudi Arabia and 10 others non-OPEC countries steered by Russia - says the Omicron is unlikely to become as disruptive to energy demand as the original novel coronavirus strain that broke out in 2020.
In its monthly demand outlook released earlier this week, the Saudi-led OPEC said it saw the world consuming 99.13 million barrels per day of crude in the first quarter of 2022, up 1.1 million from its November forecast.�
