Oil Prices Slide Ahead Of Key Inflation Report

Oil prices slid more than 2% on Thursday ahead of higher risk events that are expected to headline on Friday.

Brent had rallied above $75 earlier on Thursday in a confidence boost for OPEC+ that they had done the right thing by planning to boost production by another 400,000 bpd in January.

But by Thursday afternoon, both WTI and Brent had trailed off considerably.

At 3:05 p.m. EDT, WTI had slid $1.73 (-2.39%) to $70.63, while Brent had fallen $1.71 (-2.26%) to $74.11.

There is some fear lingering in the market with regards to additional Covid-19 measures that could dampen oil demand. But the appetite for crude oil on Thursday was also diminished by high-risk releases expected on Friday, with traders eyeing in particular, U.S. inflation figures.

Economics largely expect that U.S. inflation hit 6.8% last month.

The EIA on Wednesday adjusted its Brent spot price for this year and next, its December Short Term Energy Outlook showed. Its latest forecast or Bent crude is now $70.60 per barrel for 2021, and 70.05 per barrel in 2022.

This is down from its previous forecast made in November of $71.59 for 2021 and $71.91 for 2022. This is a far cry from November Brent prices, which the EIA says averaged $81 per barrel. For December, the EIA is banking on $71.

Another oil industry metric, Baker Hughes’ rig count, will also be released on Friday and will show the change in oil and gas drilling activity in the United States.