U.S. oil once soared 1.83%, setting a new high since November 26 to $77.37/barrel; it broke through the $80 mark in the oil distribution plate. Traders are digesting news that U.S. crude oil inventories have fallen more than expected and that U.S. crude oil production has increased. The initial rise in crude oil was triggered by the U.S. government’s oil inventory report. The data showed that although U.S. domestic crude oil production rose to the highest level since May 2020, inventories fell by 3.58 million barrels last week. U.S. gasoline inventories last week Set the biggest drop in more than a month.

WTI basically completely recovered the ground lost since omicron triggered a new round of epidemic in late November. Despite the increase in infection cases, the symptoms caused by omicron are relatively mild and have not affected the travel of Americans so far. Jeffrey Halley, senior market analyst at brokerage OANDA, said in a report: "The overnight increase in oil prices is due to the unexpected drop in U.S. crude oil and gasoline inventories, and the waning of nervousness about the virus."

Data released by the U.S. Energy Information Administration (EIA) on Wednesday (December 29) showed that as of the week of December 24, US crude oil inventories fell by 3.576 million barrels, a drop that exceeded market expectations by 2.7 million barrels. At the same time, gasoline and distillate inventories also fell by 1.726 million barrels and 1.459 million barrels, respectively, indicating that demand is still strong.

Governments around the world are worried that more and more people being quarantined due to contact with COVID-19 patients may have a negative impact on the economy. They are trying to limit the impact of the epidemic on economic growth by relaxing testing regulations and shortening the quarantine time for people who are positive for the new crown or contacts. This has also brought support to oil prices. Rob Thummel, Tortoise's portfolio manager, said that consumer behavior related to oil demand has not been affected in any way by concerns about omicron. The decline in gasoline, distillate and crude oil inventories is interpreted by the market as "signals of bullish oil."

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