Ro Elizabeth Low and Alex Longley air 12/17/2020
(Bloomberg) – Benefits from the highest settlement extended in nearly 10 months after broader markets rallied and American crude stockpiles declined more than expected.
Futures in New York rose 0.5% to over $ 48 a barrel. Crude deposits fell 3.14 million barrels last week, more than the median estimate in a Bloomberg study. Equities markets rallied and the dollar fell as hopes grew around the US $ 900 billion spending package, while Europe accelerated the rollout of the Covid-19 vaccine by Christmas.
Oil is up more than 30% since late October on hopes of a steady recovery in demand as the world gets vaccinated, but the market still faces a number of near-term hurdles into the OPEC + supply cycle next month. The International Energy Agency warned this week that the raw glue left by the pandemic will not last until the end of 2021.
“It’s not just hope that the stimulus package is agreed in the US that is pushing up prices; U.S. inventory data has also provided a positive boost, ”said Commerzbank AG analyst Barbara Lambrecht.
The corporate market, meanwhile, is strong. Indian refineries are running at full tilt and Asian demand has driven the price of Russian, Middle Eastern and US barrels higher. There are indications, however, that consumption is weakening from some countries in the region including South Korea, as the coronavirus recovers.
- West Texas Intermediate for delivery in January rose 0.5% to $ 48.06 a barrel at 10:09 a.m. London
- Brent for settlement in February gained 0.5% to $ 51.32
The mixed outlook has weakened the face of the Brent curve, which is now close to the bearish contango structure. The timeline was still 3 cents a barrel back, meaning the first month was more expensive than later ones. That compares with 13 cents in the previous week.
Other oil market news:
- Vessel owners and oil brewers were expected to be severely affected by regulations that came into effect on 1 January to help improve human health and address environmental concerns by reducing the amount of oil. sulfur in boat fuel. Of course, there was an unprecedented turmoil on both industries – but it was the cause of a pandemic that was costing economies and overspending oil demand.
- Ioran condemned an attack on a tanker at a Saudi Arabian port as a threat to maritime security, in his initial official comments about the attack against his regional rival.
- The Venezuelan national oil company began loading more than 1 million barrels of oil from a tanker that had feared a Caribbean environmental disaster.