DTN Oil

MINNEAPOLIS (DTN) -- The WTI crude oil market had a good day, closing sharply higher on the last trading day of 2022. Oil prices notched a 6.7% increase for 2022, but the severe outbreak of COVID in China and the ongoing Russia-Ukraine war, stifled better gains for U.S. crude oil in 2022. February WTI crude oil was up $1.86 per barrel (bbl) at $80.26, and March closed up $1.95 at $80.45, while March Brent crude oil was up $2.45 at $85.91.

There is still much uncertainty over if and when China's economy can recover. DTN Refined Fuels Manager Brian Milne said: "While initially greeted with enthusiasm by the market, anticipating a surge in demand for commodities, Beijing's surprise decision to end its zero-COVID policy in December is now heightening worry China might again infect the world as travel restrictions end.

"These concerns were highlighted when half of the travelers on two planes from China to Milan, Italy, tested positive for COVID this week. In response, and also due to the lack of transparency by Beijing on COVID infections and deaths, the United States on Wednesday imposed restrictions on travelers departing from China, Hong Kong, or Macau. Taking effect Jan. 5, all passengers at least 2 years old on flights originating from these locations will be required to show a negative COVID-19 test no more than two days from their departure date. Other countries are considering similar restrictions."

Baker Hughes said Friday that the total rig count was unchanged at 779 rigs, 141 oil rigs more versus last year at this time, and a little above the five-year average. Active oil rigs were down one to 621 rigs. Canada's rig count was down 12 from last week to 84, and down 90 rigs from the same time one year ago.

January RBOB was up 8.88 cents at $2.4595, and February RBOB was up 10.16 cents at $2.4783, with the January closing on a high note as it reached expiration Friday. Besides finding support from the higher crude oil Friday, RBOB futures found support on EIA data showing a sharp 613,000-bpd increase in gasoline supplied to the U.S. market during the week ended Dec. 23 to 9.327 million bpd, the highest weekly consumption rate since the last week of September. The sharp gain in demand pressed gasoline inventory down 3.1 million bbl from a five-month high to 223 million bbl, with stocks flat on the year.

Mary Kennedy can be reached at Mary.Kennedy@dtn.com