Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Oil dips on demand worries as COVID-19 lockdowns tighten

Published 12/14/2020, 09:17 PM
Updated 12/15/2020, 04:40 AM
© Reuters. FILE PHOTO: The sun sets behind a pump-jack outside Saint-Fiacre
LCO
-
NYF
-

By Alex Lawler

LONDON (Reuters) - Oil slipped towards $50 a barrel on Tuesday as tighter lockdowns in Europe and forecasts of a slower demand recovery outweighed relief from the roll-out of coronavirus vaccines.

London stepped up pandemic restrictions requiring bars and restaurants to close, Italy is considering more stringent steps over Christmas and Germany is likely to be under lockdown until early 2021.

Brent crude fell 2 cents to $50.27 a barrel at 0910 GMT. U.S. West Texas Intermediate (WTI) crude was up 2 cents at $47.01.

"It seems that the market is facing some kind of reality check as the initial euphoria of vaccine developments is subsiding," said Tamas Varga of oil broker PVM.

Oil has recovered in recent weeks, with Brent reaching $51.06, its highest since March, on Dec. 10, supported by hopes of demand recovery. Prices tanked to historic lows in March as the pandemic took hold.

But in a reminder that the immediate outlook is for further weakness, the International Energy Agency on Tuesday trimmed its demand estimates and said that any vaccine impact on demand for fuel is several months away. [IEA/M]

OPEC on Monday had said oil demand will rise more slowly than expected in 2021. [OPEC/M] The group and its allies, known as OPEC+, also delayed meetings planned for this week until early January.

"There is a growing agreement between forecasting agencies that the improvement in global oil demand might not start at the beginning of next year but in the second half," Varga said.

The latest snapshots of U.S. oil supplies are expected to show a mixed picture, with gasoline and distillate stocks rising and crude inventories falling. [EIA/S]

© Reuters. FILE PHOTO: The sun sets behind a pump-jack outside Saint-Fiacre

The first of this week's two U.S. inventory reports, from the American Petroleum Institute, is due at 2130 GMT.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.