On Thursday, oil prices rallied strongly after an earlier decline. The commodity slid down from the monthly high due to rising US fuel stockpiles and falling demand in many countries.

Brent March futures reached $81.98 per barrel, while West Texas Intermediate futures rose to $79.39 per barrel.

The price of oil was pushed down by latest US data. Crude oil stockpiles in the US declined unexpectedly last week, while fuel stockpiles increased by more than 10 million barrels - the biggest weekly build since April 2020. Demand for fuel and other oil products noticeably slumped as well. As a result, crude oil prices dived early on Thursday.

Early this week, the total number of confirmed COVID-19 cases in the US exceeded 1 million. The number of new infections increased twofold over the past week, reaching 486,000 and surpassing other countries. Travel declined, as Americans preferred to spend winter holidays at home, amid reports of the rapid spread of Omicron. The situation could persist for several weeks.

The recently published Fed meeting minutes put pressure on the price of riskier assets, including oil. According to the report, the regulator would hike interest rates faster than anticipated by the markets.

Recent supply and transport issues in various countries gave support to oil. In Canada and northern US, freezing weather threatens to disrupt extraction. Unrest in Kazakhstan, a major oil producer and OPEC+ member, also threatens supply. In Libya, oil production fell by 40% due to outages.

A day earlier, Brent and WTI futures were at their highest point since late November 2021, boosted by OPEC's decision to increase oil production by 400,000 barrels per day in February. "Our reference case now assumes the alliance will fully phase out the remaining 2.96 million bpd of oil production cuts by September 2022," JP Morgan analysts said. Rising production could indicate fears of a possible oil glut in Q1 2022 were unfounded.

JP Morgan outlook sees the average price of Brent crude reach $88 in 2022, up from $70 last year.