Oil prices fall as virus cases climb
Singapore — Oil prices slipped on Tuesday as investors remained concerned about climbing coronavirus cases globally, though an expected drawdown in crude oil inventory in the US for a fifth straight week stemmed losses.
After falling on Monday, Brent crude oil futures slipped by 9c, or 0.2%, to $55.57 a barrel by 1.35am GMT, while US West Texas Intermediate (WTI) fell by 8c, or 0.2%, to $52.17 a barrel.
Worldwide coronavirus cases surpassed 90-million on Monday, according to a Reuters tally, as nations around the globe scramble to procure vaccines and continue to extend or reinstate lockdowns to fight new coronavirus variants.
“I think the market will be rapid to conclude that yesterday’s modest pullback in price, provided the virus spread in China remains contained, was but a blip on the radar screen,” said Stephen Innes, chief global market strategist at Axi in a note, citing the prospect of increased economic stimulus in the US.
President-elect Joe Biden, who takes office on January 20 with his Democratic party in control of both houses, has promised “trillions” in extra pandemic-relief spending.
US crude oil stockpiles are likely to have fallen for a fifth straight week, while refined products inventories were seen up last week, a preliminary Reuters poll showed on Monday.
The poll was conducted ahead of reports from industry group American Petroleum Institute on Tuesday and the Energy Information Administration (EIA), the statistical arm of the US department of energy, on Wednesday.
Brent could rise to $65 a barrel by summer 2021, Goldman Sachs said, driven by Saudi cuts and the implications of a shift in power to the Democrats in the US. The Wall Street investment bank had previously predicted oil would hit $65 by year-end.
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