TOKYO (Reuters) – Oil prices plummeted on Tuesday, surpassing some of the previous session ‘s gains, as hopes for a swift agreement of new U.S. economic stimulus were dashed while new coronavirus infections spread across the region. the world is going up.
Brent crude went down 15 cents at $ 55.73 before 0135 GMT, after going up nearly 1% on Monday. U.S. crude was also lower, falling 5 cents to $ 52.72, after falling 1% in the previous session.
Recently seizing 11-month highs, oil has caught on between skeptical doubts about any resurgence in demand as the pandemic continues to decline, balanced by hopes for further stimulation from the newly introduced Biden administration in the United States to support economic growth as vaccines are rolled. out.
But Biden administration officials are still trying to convince Republican lawmakers that more stimulus is needed, raising questions about when it will be adopted.
“Through 2021, there are still significant supply and demand risks that threaten to turn foundations into a much tighter or richer market,” Citigroup said in a note.
The bank said the risk of higher supply would be lifted if sanctions on crude Iran are lifted, or if U.S. drills encourage carbon production, against the shock of increased demand from the latest wave of locks and restrictions .
European countries have set strict restrictions to counter the spread of the virus, while China reports that new COVID-19 cases are on the rise, throwing a loss about the prospects to the largest power consumer. largest in the world.
However, there are areas where demand for oil remains strong. In India, crude oil imports increased in December to their highest level in more than two years when the easing of coronavirus restrictions boosted economic activity.
On the supply side, compliance by the Organization of Petroleum Exporting Countries and its allies on promising oil production loops averaged 85% in January, the administrator of the Petro-Logistics tanker said Monday. The findings show that the organization has developed compliance supply reduction commitments.
Also, output from the Tengiz large area in Kazakhstan was disrupted by a power cut on 17 January.
Reporting by Aaron Sheldrick; Edited by Kenneth Maxwell