Peter Nurse   

Investing.com – Oil prices dropped on Thursday, despite disappointing U.S. unemployment statistics. However, oil prices remained at near 2-month highs due to expectations that the global supply will be limited as economic recovery progresses. 

At 8:50 am ET (1350 GMT), futures had fallen 0.5% to $82.21/barrel and fell 0.3% at $84.40. The contracts both gained over 1% from November’s levels.

U.S. The price of gasoline RBOB Futures was down 0.4% to $2.3825 per gallon.

The number of Americans filing new claims for unemployment benefits unexpectedly rose in the first week of January, with  for state unemployment benefits increasing 23,000 to a seasonally adjusted 230,000 for the week ended Jan. 8. Although this figure indicates that Covid-19 is increasing, claims are still below pre-pandemic levels.

Oil prices have generally been buoyant so far this year, continuing the 2021’s substantial gains, buoyed by expectations that a strong economic recovery will boost demand, particularly as concerns over the Omicron Covid variant ease. 

Adding to the concern are concerns over the rate at which top producers add supply to the market. The Organization of the Petroleum Exporting Countries (OPEC+) is having trouble meeting its output growth promises.

“Sentiment has been broadly constructive since the start of the year due to a number of supply disruptions and growing concerns over OPEC spare capacity,” said analysts at ING, in a note.

Large consumers nations appear also to be short of strategic reserve space.

According to Tanker Trackers’ Samir Madani, the latest U.S. Energy Department sale reduces the Strategic Petroleum Reserve’s holdings to less than 100 days of import cover. International agreements require the U.S. and other advanced economies to hold at least 90 days’ worth of imports.

After data from U.S. Energy Information Administration showed an increase of 8 million barrels in last week’s session, gains were moderated Thursday. This suggests that the Omicron surge was affecting U.S. drivers.

The U.S. Centers for Disease Control and Prevention reported Wednesday that Covid-19 deaths have increased by 40% and hospitalizations by 33% in America.

However, Dr. Rochelle Wilensky, CDC director, stated that the current increase in deaths may be due to the Delta variant. This was evident before Omicron became a reality in the United States.