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Oil set for 20% drop in 2020 as lockdowns weigh, market eyes more stimulus

CommoditiesDec 30, 2020 10:15PM ET
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© Reuters. FILE PHOTO: 3D printed oil barrels and percentage symbols are seen in front of dollar banknotes in this illustration

By Naveen Thukral

SINGAPORE (Reuters) - Global crude oil markets have lost about a fifth of their value in 2020 as strict coronavirus lockdowns paralysed much of the global economy, but prices have rebounded strongly from their lows as governments rolled out stimulus.

On Thursday, the last trading day of 2020, Brent was trading down 25 cents, or 0.5%, at $51.38 a barrel, as of 0246 GMT and U.S. West Texas Intermediate (WTI) lost 0.2%, or 11 cents, to $48.29 a barrel.

"It is kind of year-end quiet but a weaker dollar is helping keep a floor under markets," said Stephen Innes, chief global market strategist at Axi.

Brent and WTI have more than doubled from decade-lows seen in April, putting past a year which marked the first negative prices for WTI that shocked investors globally.

Asian shares are set to end a tumultuous 2020 by hovering near record highs on Thursday while riskier currencies cruised near 2-1/2-year peaks, buoyed by hopes that COVID-19 vaccine rollouts will help the world beat the pandemic. [MKTS/GLOB]

The dollar was ending 2020 in a downward spiral on Thursday with investors wagering a global economic recovery will suck money into riskier assets even as the yawning U.S. twin deficits argue for an ever cheaper currency. (USD)

In the short-term, concerns over coronavirus lockdowns are likely to cap gains.

A new variant of the virus in the United Kingdom has led to the reimposition of movement restrictions, hitting near-term demand and weighing on prices, while hospitalizations and infections have surged in parts of Europe and Africa.

On the supply front, U.S. energy firms this week added 3 oil and natural gas rigs to the best quarter for boosting the rig count since the second quarter of 2017, according to data from Baker Hughes.

A Jan. 4 meeting of the Organization of the Petroleum Exporting Countries and allies, including Russia, a group known as OPEC+, is set to boost output by 500,000 barrels per day in January.

Oil set for 20% drop in 2020 as lockdowns weigh, market eyes more stimulus
 

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Comments (9)
John Swiecki
John Swiecki Dec 31, 2020 4:19AM ET
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Help me out here guys and girls. What are the “US twin deficits”?  Thanks.
Joel Schwartz
Joel Schwartz Dec 30, 2020 11:15PM ET
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Look guys, between the work from home trend, higher unemployment in sectors which require commuting and EV trend, oil’s high is in. What it has going for it now is government subsidies & inflation - that’s it.
Gamer Turtle
GamerTurtle Dec 30, 2020 11:15PM ET
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that's fundamental which is medium to long term. short term goes the way big pockets need them to go.
Chris Mallory
Chris Mallory Dec 30, 2020 11:13PM ET
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Great News. I drove as many or more miles than in 2019.
Elvis Durant
Elvis Durant Dec 30, 2020 10:22PM ET
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Reuters = Hopium On Vaccine/Stimulus. Dropium on Virus Lockdown/Stimulus fail. Investing.com also same path.....🤦🏽‍♂️🤦🏽‍♂️🤦🏽‍♂️🤣🤣🤦🏽‍♂️🤦🏽‍♂️🤦🏽‍♂️🤣🤣🍾🍾🍾
Data First
DataFirst Dec 30, 2020 10:22PM ET
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Feel like many journalists are writing to pump & dump stocks from home ;). Lots of silly tiny data, no big picture
Rusty Jabour
RBull Dec 30, 2020 10:15PM ET
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This is from Fauci in paragraph SEVEN of another Reuters scare story: “He also stressed that the so-called UK variant is believed to be no more severe in the symptoms it causes and possesses no special ability to evade the antibodies induced by the newly approved COVID-19 vaccines now in distribution.”Reuters always buries the real story to promote their own deathly view of the world.
Kaveh Sun
Kaveh Sun Dec 30, 2020 10:11PM ET
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The title meant they predict 20% drop for 2020. Except 1 more day 2020 is over. Reuters hire crappy writers.
John Swiecki
John Swiecki Dec 30, 2020 10:11PM ET
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It’s going to be a wild day!
Rusty Jabour
RBull Dec 30, 2020 10:10PM ET
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Reuters always writes the same ********... “concerns over coronavirus lockdowns are likely to cap gains” but then they say oil has rebounded. They also always mention the virus variant but never acknowledge the vaccine is believed to work against it. They are negative naysayer flacks for BEARS.
Jon Bal
Jon Bal Dec 30, 2020 9:29PM ET
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that gives me 26 hours...plenty of time
Robert Nchor
Robert Nchor Dec 30, 2020 9:21PM ET
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This headline or title is very misleading. I don’t know the writers on here always want to add undue fear to their articles.
 
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