On December 7, oil prices decreased. Rates continued the previous session’s decline after California tightened its pandemic lockdown through Christmas and coronavirus infections boosted in Europe and the United States.
Brent crude declined by 3 cents and settled at $48.76 a barrel by 1534 GMT. U.S. West Texas Intermediate (WTI) crude futures fell by 21 cents and touched $45.55. Significantly, Brent crude and WTI benchmarks dropped by nearly 1% on Monday.
Moreover, oil prices briefly buoyed after Pfizer distributed the world’s first fully-tested coronavirus vaccine in the United Kingdom. Still, investors swiftly returned their focus to declining fuel demand caused by the epidemic.
As we already mentioned, the COVID-19 situation worsens every day. Countries have renewed lockdowns, including strict measures in California, Germany, and South Korea.
According to the government, France may have to delay unwinding some lockdown restrictions the following week. The downward trend in new cases had flattened after the government permitted the shops to reopen in late November.
Analysts announced they were closely observing U.S. lawmakers’ efforts to approve a new economic stimulus package. It is needed to drive job growth and energy demand.
According to the head of oil markets at Rystad Energy, Bjornan Tonhaugen, supply expectations are firmer after the OPEC+ meeting. Therefore, prices should not deviate much for a while.
OPEC+ will increase oil output by 500,000 BPD
Additionally, the OPEC+ group of oil producers expect to hold their next meeting on January 4. They agreed last week to increase oil output by 500,000 barrels per day (BPD) next month.
According to a preliminary analyst poll, data from the American Petroleum Institute due on Tuesday and the U.S. government on Wednesday is likely to show that U.S. crude stocks dropped last week while refined product stockpiles grew.
Another essential thing to mention is that U.S. crude oil production anticipates a decline by 910,000 BPD in 2020 to 11.34 million BPD. According to the U.S. Energy Information Administration, a more significant drop than its previous forecast for a drop of 860,000 BPD.
Furthermore, the American Petroleum Institute revealed that U.S. oil inventories increased sharply across the board last week. Crude stocks rose by 1.14 million barrels.
International oil prices have begun marginally lower on December 9 morning in Asian trade. WTI Crude Oil could resume its sideways to marginal downside momentum under $46.00 levels, where its support stands at $45.30-$44.80 and resistance is at $46.10-$47.20 levels.