Oil prices extends losses, dipping below US$48 despite United States stimulus
- by Claude Bryan
- in Markets
- — Jan 1, 2021
U.S. West Texas Intermediate (WTI) crude had added 37 cents to trade at $48.37, down from around $62 at the beginning of 2020.
Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, spoke on macros coming from COVID-19 fronts calming the nerves of oil traders from selling below the $50 price level.
"This morning the American Petroleum Institute reported a much larger draw versus consensus in crude oil inventories for the week ending December 25".
In this way, the losses in the greenback have become the key factor that has kept the oil prices higher, as the oil price is inversely related to the price of the United States dollar.
After Trump backed down from a threat to block the package, Democrats on Monday will try to push through expanded $2,000 relief payments.
NEW YORK (Reuters) -Oil prices fell on Monday as concerns about weakening fuel demand and the prospect of higher OPEC+ output outweighed optimism over a US stimulus package.
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Gains continue to be capped, however, by OPEC's plans to gradually increase oil production after the start of the year despite lockdowns and depressed demand.
But a new variant of the virus in the United Kingdom has led to restrictions on movement being reimposed, hitting near-term demand and weighing on prices, while hospitalizations and infections surged in parts of Europe and Africa.
That is up from a poll last month that forecast a 2021 average price of $49.35 per barrel but little changed from Brent trading at around $51 on Thursday.
The next major oil price driver will be a January 4 meeting of the Organisation of the Petroleum Exporting Countries and allies including Russian Federation, a group known as OPEC+, which will debate boosting output from February.
The group is tapering record oil output cuts made this year to support the market.
The Organization of the Petroleum Exporting Countries and its partners, collectively known as OPEC+, will return 500,000 barrels per day (bpd) of output to the market starting in January 2021.
