Oil Up, Reverses Earlier Losses but Fuel Demand Worries Remain

Brent oil rises on weaker dollar though IEA cuts demand outlook

By Administrator_India

Capital Sands

Oil was up Monday morning in Asia. However, a resurgence of COVID-19 globally continues to take an economic toll and dampen fuel demand.

Brent oil futures were up 0.29% to $55.18 by 8:41 PM ET (1:41 AM GMT) and WTI futures inched up 0.06% to $52.23. Both Brent and WTI futures remained above the $50 mark, however.

Continuous fuel demand worries stalled a rally in oil that started at the beginning of November. However, the futures curve points to a more balanced market as WTI and Brent futures move further into backwardation, indicating a tightness in supply, despite headline prices treading water.

Chinese data released over the weekend disappointed, with lower-than-expected manufacturing and non-manufacturing purchasing managers indexes (PMI) reported on Sunday. The manufacturing PMI was 51.3, against the 51.6 in forecasts prepared by Investing.com and December’s 51.9. The non-manufacturing PMI came in at 52.4, against December’s 55.7.

The data also indicates that efforts to curb resurgent COVID-19 outbreaks in the country are slowing down the economic recovery as the Lunar New Year holiday approaches. Investors await the Caixin manufacturing PMI, due later in the day, and the Caixin services PMI, due later in the week.

Demand worries also continue in the world’s largest economy. Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota, warned on Sunday that the new COVID-19 variant circulating in the U.K. could become the dominant strain in the U.S., potentially leading to future restrictions on in-person gatherings.

However, discipline on the part of producers helped to check the black liquid’s losses. The Organization of the Petroleum Exporting Countries and its partners, or OPEC+, reportedly implemented an estimated 99% of the agreed-to production cuts in January. OPEC members’ cuts implementation were at 103% in January, while those for non-OPEC partners, including Russia and Kazakhstan, were at 93%.

The cartel’s Joint Technical Committee will present its assessment to the Joint Ministerial Monitoring Committee (JMMC) that will meet on Wednesday. The JMMC is also reportedly unlikely to recommend any policy changes.

Meanwhile, Chevron Corp. (NYSE:CVX) awaits further clarity on the COIVID-19 and OPEC trajectories before resuming an increase in shale output.

Related Posts
Britain to place more parts of country in tier 4 of COVID curbs
Britain to place more parts of country in tier 4 of COVID curbs

By Administrator_India Capital Sands British Prime Minister Boris Johnson has approved placing more parts of the country into tier 4 Read more

Deal or no deal, Britain to pay high price for Brexit
Deal or no deal, Britain to pay high price for Brexit

By Administrator_India Capital Sands Brexiteers have long argued that leaving the European Union, with or without a trade deal, would herald Britain's Read more

Biden picks Janet Yellen for treasury secretary
Biden picks Janet Yellen for treasury secretary

By Administrator_India Capital Sands President-elect Joe Biden plans to nominate former Federal Reserve Chairwoman Janet Yellen, an economist at the Read more

US becomes first nation to cross 10 million COVID-19 cases as third wave of infections surges
India had nearly 74 million COVID-19 cases by August: ICMR's second national serosurvey

By Administrator_ India Capital Sands The United States became the first nation worldwide since the pandemic began to surpass 10 Read more

0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
0
Would love your thoughts, please comment.x
()
x