Oil futures traded lower on Thursday, with crude ending 2020 down more than 20% for the year that saw lost demand with the COVID-19 pandemic that prevented it business and consumer travel and activity.
West Texas Raw Intermediate for Delivery in February CL.1,
down 43 cents, or 0.9%, to $ 47.97 a barrel on the New York Mercantile Exchange early Thursday. March Brent crude BRNH21,
the global benchmark, down 50 cents, or 1%, was at $ 51.13 a barrel on ICE Futures Europe.
However, WTI was on track for a monthly increase of 5.8%, and Brent has gained more than 6% this month.
“With the rate of global locks appearing to be only slightly faster than an obstacle for oil markets, traders are looking forward to riding a vaccine wave of economic optimism into 2021, ”Stephen Innes, Axi’s chief global markets strategist, said in a note.
Through Thursday’s closure, however, WTI was on track for a 20.7% fall in 2020 based on monthly contracts, the biggest annual decline since 2018 and its second annual fall in three years, according to Dow Jones Market Data . However, the U.S. benchmark reversed a sharp decline from an unprecedented fall that saw oil futures – and close – futures contract trade into a negative territory for the first time ever in March.
See: Why oil prices are not expected to see a rapid recovery from a loss of more than 20% in 2020
Brent crude was on track for an annual fall of 22.2%, the highest number since 2015.
Crude was boosted Wednesday by a larger-than-expected fall in U.S. crude investments, as well as renewed weakness in the U.S. dollar. US DXY ICE Dollar Index,
the U.S. currency was weighed against a basket of six major competitors, off slightly on Thursday, a day after slipping to a 2 1/2-year low.
A weaker dollar is generally seen as a positive for commodities at the U.S. unit price, making them cheaper for consumers using other currencies. Expectations for a lower move for the dollar have raised expectations among bulls for further gains for raw and other products in 2021.
Read: How a weaker dollar could help fuel commodity increases in 2021
Weekly natural gas storage data is due later Thursday from the Energy Information Administration. Analysts surveyed by S&P Global Platts expect the report to show that 123-billion cubic feet was withdrawn for the week ending December 25th.
The future of natural gas NGG21,
fell 0.9% to $ 2.422 per million British thermal units.
January Gasoline RBF21,
fell 0.5% to $ 1.4052 gallons, while January heating oil was down 1.3% at $ 1.47 gallons.