Oil prices have ended the year 2021 with the highest annual gains in 12 years.
The significant gains in oil prices came driven by the global economic recovery from the recession caused by the Coronavirus pandemic and restrictions adopted by producers.
In the trading of the last day of 2021, Brent crude futures ended the year up 53%. US crude futures gained about 57%, which is the strongest performance of the two benchmark contracts since 2009. At the time prices rose by more than 70%.
“We’ve had Delta and Omicron and all manner of lockdowns and travel restrictions, but demand for oil has remained relatively firm. You can attribute that to the effects of stimulus supporting demand and restrictions on supply,” said CommSec Chief Economist Craig James.
However, on Friday, oil prices stopped increasing after rising for several consecutive days. COVID-19 cases rose to new high levels globally, from Australia to the United States, due to the highly contagious Coronavirus Omicron variant.
Brent crude futures fell 86 cents, or 1.1%, to $78.67 a barrel. US West Texas Intermediate crude futures fell 80 cents, or 1%, to $76.19 a barrel.
Yesterday, the US Department of Energy said that it had agreed to withdraw two million barrels of crude oil from its strategic reserves for the benefit of ExxonMobil as part of a previously announced plan aimed at reducing gasoline prices.
The ministry added that it has withdrawn a total of more than seven million barrels of reserves to boost the country’s fuel supply.
Oil prices rose slightly on Thursday, supported by expectations that demand for fuel would remain at its current rates. This is despite the increase in cases of Omicron strain of the Coronavirus, and the continuation of OPEC and its allies to gradually increase imports.
The gains eased as China, the world’s largest importer, cut its first batch of crude import quotas in 2022.
OPEC+ will meet on January 4 to decide whether to continue to increase production in February.