Steady oil price: is another drop in US crude oil inventories in the offing?

 

oil price wednesday

Oil price is on the rise and the EIA, the US Energy Information Administration, has not released its latest US oil inventory report yet – a reliable factor that influences the current crude oil price.

The confidence of investors, however, indicates the inventories may have been down during the Christmas week too.

The American Petroleum Institute, API, meanwhile, predicted a draw in crude oil inventories of 4.785 million barrels for the week ending December 25; the prediction of the same by analysts, however, was 43% of that figure for the same period.

Although yet another vaccine was approved by the health authorities in the United Kingdom, the national mood could easily be eclipsed by the surging infections and the struggles faced by the NHS, the National Health Service, to cope with the patients.

That means there is a strong possibility of elevating the current tier, to a notch above, seriously restricting the movement of the public – and traffic too.

A development of that kind in a major Western economy will affect the demand for crude oil and has the potential to skew the healthy growth of the oil price during the past few weeks.

As far as jet fuel consumption is concerned, meanwhile, there are no signs of green shoots yet. The emergence of new variant of the Coronavirus, first in the UK and then gradually in the rest of world, dampened the hopes of the aviation industry for a quick recovery.

The following live image, taken on Wednesday afternoon, shows the sad state of the industry in crisis – the state of the Heathrow airport, near London, which used to be one of the busiest airports in the world with a plane landing or taking off  in every 2-minute intervals.

Heathrow now


Despite the gloom, the aviation industry is hopeful that they can rise from the ashes again, once the pandemic shows irreversible signs of decline – as normally what happens with pathogens after a certain period of time.

Nobody doubts the collective resilience of the industry to weather the storms.

 

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