Oil price is slightly down on Thursday in the
markets. A major factor that determines the price, however, is down again for
the third consecutive week since the Christmas.
The rate of drop has come down, though.
US crude oil inventories, according to the data
published by the EIA, US Energy Information and Administration, are down by
over 3 million barrels per day in the week ending January 8th.
The corresponding predicted inventory draw by the API,
American Petroleum Institute, was much higher than the figure given by the EIA –
over 5 million barrels.
The consistency of the inventory draw for three
successive weeks shows that the demand is rising and even irreversible, despite
the numerous logistical issues surrounding the vaccination programmes and
potential to cause more mayhems by the new variants of the Covid-19.
The EIA is also optimistic about the future demand
of oil in 2021 – and beyond it; it maintains a positive outlook.
The demand in Asia, meanwhile, is on the rise and
the Middle Eastern producers grabbed the opportunity to increase the price for
the region in order to cash in on the development.
By doing so, they are to tackle their own budget
deficits, before it is too late.
If they go too far down the lane of production cuts,
the US shale producers will be back at play, something that the OPEC+ does not
want to see; the UAE has already voice their concern about such a development.
