Oil prices fell on Monday as concerns about weakening fuel demand. Therefore the prospect of upper OPEC+ output outweighed optimism over a U.S. stimulus package.
Oil prices strengthened earlier within the day, with Brent rising above $52 a barrel. As Democrats aimed for larger $2,000 COVID-19 relief payments following U.S. President Donald Trump’s signing of a $2.3 trillion stimulus deal.
But a replacement variant of the virus within the UK has led to restrictions on reimposing the movement. Hitting near-term demand and weighing on prices, while hospitalizations and infections surged in parts of Europe and Africa.
Brent crude settled at $50.86 a barrel, falling 43 cents, or 0.84%, after trading as high as $52.02 earlier within the session. U.S. West Texas Intermediate (WTI) crude settled at $47.62 a barrel, losing 61 cents, or 1.26%.
“We still specialize in this pandemic and what January goes to bring,” said John Kilduff, partner at Again Capital in NY. “The prospects of more lockdowns are looming and that I think that’s what’s holding things back.”
In a Jan. 4 meeting of the Organization of the Petroleum Exporting Countries and allies including Russia. A gaggle referred to as OPEC+ also looms over the market.
“While much focus will remain on the demand side of the world oil balances in the week and into the New Year. The availability side of the equation are garnering more attention next month after OPEC+ cranks up its production allowances,” said Jim Ritterbusch of Ritterbusch and Associates in Houston.
The group is tapering record oil output cuts made this year to support the market.
OPEC+ is ready to spice up output by 500,000 barrels per day in January, Also, Russia supports another increase of the identical amount in February.
Meanwhile, U.S. fossil oil stockpiles declined last week. On the other hand, refined product inventories likely rose, a preliminary Reuters poll showed on Monday.
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