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Crude and other risk assets such as equities also got a boost
after the U.S. Federal Reserve gave an upbeat economic outlook,
which lifted investor spirits even as the Fed flagged a
long-awaited end to its monetary stimulus. [MKTS/GLOB]
Brent crude oil was up 65 cents, or 0.9%, to $74.53 a barrel at
1215 GMT, while U.S. West Texas Intermediate (WTI) crude rose
$1.01 or 1.4%, to $71.88.
Demand has been rising in 2021 after last year's collapse, and
the U.S. Energy Information Administration (EIA) on Wednesday
said product supplied by refineries, a proxy for demand, surged
in the latest week to 23.2 million barrels per day (bpd). [EIA/S]
"These figures suggest a healthy economic backdrop," said Tamas
Varga of oil broker PVM.
"Although the Fed's announcement triggered a jump in both oil
and equity prices, the withdrawal of economic support together
with the Omicron crisis are the two major headwinds the oil
market is currently facing," he added.
Lending further price support, the EIA also reported that U.S.
crude stocks fell 4.6 million barrels, more than analysts had
forecast.
Worries about the virus and the prospect of a supply surplus
next year, as flagged by the International Energy Agency in its
monthly report this week, limited gains. [IEA/M]
Britain and South Africa reported record daily COVID-19 cases
while many firms across the globe asked employees to work from
home, which could limit demand going forward.
"We are sceptical despite the latest news that the good
sentiment on the oil market will be carried over into the first
quarter," said Barbara Lambrecht of Commerzbank. "After all, a
substantial supply surplus is looming."
(Additionalreporting by Jessica Jaganathan; Editing by Jason
Neely and Mark Potter)
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