In the final day’s trading of a tumultuous 2021, Crude Oil WTI ended Friday down 2.13%.
Fueling the bearish sentiment in the oil markets was a heavy bout of profit taking and news that China’s government slashed the amount of crude oil import quota awarded to independent oil refiners and favored large, complex processors as it looks to reform the sector.
Despite the losses on Friday which also saw Brent Oil close down 2.10%, Crude Oil enjoyed a fruitful December and its strongest year since 2009.
Despite threats from COVID-19 to derail the global economy, the year turned out to be a strong one for the commodity bulls as output cuts by OPEC+ delivered the largest rally since 2016.
For December itself, Crude Oil WTI was up 14%. For the year, Crude Oil WTI posted a 59% gain, its biggest gain since 2009 post the financial crash.
The last weeks of December are normally strong periods of demand for gasoline and diesel in the United States as people take to the road for the holiday period. Meanwhile, due to seasonal demand for goods, Trucking activity also increases at this time of year boosting demand.
Even though it has been a very strong year for the oil bulls, 2021 has not been without its challenges and its ups and downs. Crude Oil WTI hit a four-month low sub $65 in November after hitting a seven-year high above $85 in October as sentiment swung wildly on the coronavirus pandemic and the discovery of new variants.
Key OPEC+ Meeting Ahead
As the last days of oil trading of 2021 draws to a close, all eyes will now be on the 23-nation OPEC+ meeting led by Saudi Arabia and Russia on the 4th of January. The meeting is expected to confirm an output increase of 400,000 barrels-per-day for February if market conditions are considered appropriate.
Saudi King Salman recently called on all oil producers to maintain the alliance’s output caps and recommendations to ensure market stability.
