Oil posts second straight down week on worries about Coronavirus vaccine rollout
Oil prices dipped on Friday due to demand worries over coronavirus variants and slow vaccine rollouts, which offset a bullish sentiment due to a cut in Saudi Arabian oil supply and falling U.S. oil inventories.
Global benchmark Brent crude futures gained 0.63% to settle at $55.88 per barrel. The contract posted its fourth positive week in five.
U.S. West Texas Intermediate (WTI) crude futures settled 0.27% lower at $52.20 per barrel. The contract registered its second straight negative week.
Both front month Brent and WTI were on track to post a weekly gain of less than 1%.
A Reuters poll showed oil prices are expected to hover around current levels for much of 2021 before a recovery gains traction towards year end.
“Restrictions on the demand side because of lockdowns are countered by a sufficient reduction in supply ... preventing prices from falling or rising to any significant extent,” said Commerzbank analyst Carsten Fritsch.
Saudi Arabia is set to cut output by 1 million barrels per day (bpd) in February and March. Compliance with output curbs by the Organization of the Petroleum Exporting Countries and allies, together known as OPEC+, improved in January.
OPEC oil output rose in January, a Reuters survey found, after OPEC+ agreed to an easing of supply curbs.
However, the rise was less than the amount agreed under the deal, with an involuntary drop in Nigerian exports limiting the increase.
A 9.9 million barrel drawdown in U.S. oil inventories last week and forecasts for a small drop in U.S. oil production in February provided price support.
Reference: CNBC
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