Reuters | Jan 15, 2021 01:50
* Oil market pauses after hitting 11-month high earlier this
* China reports most new COVID-19 cases in more than 10
* Oil market outlook clouded by vaccine rollout variables
* China's crude imports hit record on stockpiling, new
* U.S. crude stockpiles drop, fuel inventories build -EIA
(Updates prices, bullets)
By Devika Krishna Kumar
NEW YORK, Jan 14 (Reuters) - Oil prices dipped on Thursday
as surging coronavirus cases in Europe and new lockdowns in
China renewed worries about global oil demand and eclipsed
bullish signals from Chinese import data and U.S. crude oil
Brent crude oil futures LCOc1 fell 28 cents, or 0.5%, to
$55.78 a barrel by 12:20 p.m. ET (1720 GMT,) while U.S. West
Texas Intermediate (WTI) CLc1 dropped 1 cent to $52.90.
China, the world's second-largest oil consumer, reported its
biggest daily jump in new COVID-19 cases in more than 10
Governments across Europe have announced tighter and longer
coronavirus lockdowns, with vaccinations not expected to have a
significant impact for the next few months.
"The complex remains in pause mode, a development that
should not be surprising given the magnitude of the oil price
gains that have been developing for some 2-1/2 months," Jim
Ritterbusch, president of Ritterbusch and Associates, said.
Global benchmark Brent hit an 11-month high just below $57
on Tuesday, bolstered by Saudi Arabia's plans to limit supply.
"Global oil demand improvement during the next few months
may well be intersecting with reduced production as the Saudis
initiate their voluntary cuts at a time when U.S. shale
producers are showing reluctance in boosting output in response
to higher prices."
The Organization of the Petroleum Exporting Countries left
its forecast for world demand unchanged, saying oil use will
rise by 5.9 million barrels per day this year to 95.91 million
bpd, following a record 9.75 million bpd contraction last year
due to the pandemic. Oil producers face an unprecedented challenge balancing
supply and demand as factors including the pace and response to
COVID-19 vaccines cloud the outlook, said an official at the
International Energy Agency (IEA). Saudi Arabia, for example, is throttling oil supply to some
Asian buyers, refinery and trade sources told Reuters, while
Russia plans to ramp up output this year, according to Russian
media. "The Saudi cuts are priced in since last week, even a bit
more than was reasonable under market conditions, and a
rationalisation of prices was overdue," said Rystad oil market
analyst Bjornar Tonhaugen.
"Seeing COVID-19 infections rise in China by the largest
margins in a long time is alarming for the market and, combined
with strict ongoing lockdowns in Europe, may affect oil demand
much more than initially anticipated in the first quarter."
Brent's six-month backwardation, whereby contracts for later
delivery are cheaper, fell to its lowest since Jan. 5,
indicating bullish sentiment easing.
Despite the coronavirus shock, China's total crude oil
imports rose 7.3% in 2020, with record arrivals in the second
and third quarters as refineries expanded operations and low
prices encouraged stockpiling, customs data showed. giving a floor to prices, U.S. crude oil stockpiles
last week fell more than expected, though gasoline and
distillate inventories rose as refiners ramped up output,
government data showed on Wednesday. EIA/S
Raising hopes of increased oil demand was a hefty U.S.
COVID-19 relief package, which President-elect Joe Biden is due
to unveil on Thursday.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.
More content, faster quotes and charts, and a smoother experience is available only on the App.