Oil was down Tuesday morning in Asia, with rising numbers of COVID-19 cases globally contributing to rising fuel demand worries. However, expectations of a drawdown in U.S. crude oil inventory helped to limit losses for the black liquid.
Brent oil futures edged down 0.13% to $55.59 by 10:27 PM ET (3:27 AM GMT) and crude oil WTI futures inched down 0.06% to $52.22. Both Brent and WTI futures remained firmly above the $50 mark.
The number of global COVID-19 cases surpassed 90.87 million as of Jan. 12, according to Johns Hopkins University data. A worldwide scramble to procure and roll out COVID-19 vaccines continues, with some countries extending or re-instating lockdown measures to curb the spread of the virus.
“I think the market will be rapid to conclude that yesterday’s modest pullback in price, provided the virus spread in China remains contained, was but a blip on the radar screen,” Axi chief global market strategist Stephen Innes said in a note, citing the prospect of increased U.S. economic stimulus.
President-elect Joe Biden, who alongside with his administration will be sworn into the role on Jan 20, has promised “trillions” worth of further COVID-19 stimulus measures.
Meanwhile, U.S. crude oil supply data from the American Petroleum Institute (API) is forecast to show a fifth consecutive week of draws, with data released during the previous week showing a draw of 1.663 million barrels. Investors now await the API data, which is due later in the day.
However, Goldman Sachs is predicting that Brent futures could rise to $65 per barrel by summer 2021, after previously predicting that the level would be reached by the end of the year. The investment bank expects that the move will be driven by the production cuts announced by Saudi Arabia during the previous week, as well as the transition to a White House and Congress controlled by Democrats.