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Oil prices fell on Monday, extending losses that last week ended a rally driven by production cuts and strong Chinese demand. Brent crude fell nearly 1%, to $54.65 a barrel. U.S. oil was down by nearly 1%, at $51.93 a barrel. U.S. drillers added pressure by putting more rigs to work for an eighth consecutive week last week.
Oil prices rose on Wednesday to their highest since February 2020 after Saudi Arabia agreed to reduce output more than expected in a meeting with allied producers, while industry figures showed U.S. crude stockpiles were down last week. Brent crude rose as much as nearly 1% to $54.09 a barrel. U.S. West Texas Intermediate (WTI) futures reached $50.24 a barrel.
Exxon Mobil Corp signalled in a regulatory filing that higher oil and gas prices and improved chemicals margins would aid fourth-quarter results, but the gains would be overshadowed by an up to $20 billion asset write down. Exxon expects higher prices will sequentially lift its oil and gas operating results by between $200 million and $1 billion.
A few days ago, Reliance Industries Limited (RIL) and BP announced the start of production from the R Cluster. It is an ultra-deepwater gas field in block KG D6 off the east coast of India. it is located at a depth of more than 2,000 meters, making R Cluster the deepest offshore gas field in Asia. RIL and BP are developing three deepwater gas projects in block KG D6.
The six week long futures rally has come to a halt with the increasing lockdown in Europe. As a result, oil prices fell on Wednesday. Brent dropped and was traded at $50.51 a barrel. WTI went down and was traded at $47.28 a barrel. Slower US spendings and substantial decrease in the demand for refined products has adversely affected the market sentiments.
On Monday, oil prices climbed on the back of hopes of improvement in fuel demand after vaccine rollout. However, tanker explosion in Saudi Arabia capped the gains of the session. Brent went up bu 0.8% and was traded at $50.35 a barrel. WTI increased by 0.7% and was traded at $46.89 a barrel.
With the rollout of COVID-19 vaccine in Britain, oil prices rose on Thursday. And the United States is also expected to approve the vaccine soon which would witness a spur in fuel demand. WTI went up by 0.5% and was traded at $45.75 a barrel. Brent increased by 0.4% and was traded at $49.07 a barrel.
Coronavirus cases continue to rise in the United States and Europe. Oil prices added to the losses of the previous session on Tuesday. WTI slipped by 0.4%, to $45.58 a barrel. Brent fell by 0.5%, to $48.55 a barrel. ANZ Research said, "For the moment, the market is happy to look past these issues as the vaccine rollout begins; however the economic headwinds are building in the short term".
On Monday, rising coronavirus cases in different parts of the world led to the decline in oil prices. The increasing tension between the US and China also contributed towards this downfall. Brent went down by 1.5% and was traded at $48.49 a barrel. WTI slipped by 1.8% and was traded at $45.44 a barrel.
A big decision comes the industry's way as Denmark decides to retire from the North Sea. On Thursday, the Danish Parliament voted in favour of ending the offshore oil and gas extraction. The nation has cancelled it's latest licensing round, saying the country is "now putting an end to the fossil fuel era". Currently, one-third of Denmark's electricity production derives from wind turbines.
China has launched 1,100 km section of China-Russia East gas pipeline. Operations have already started in the middle portion of the pipeline. This will facilitate smog-prone Beijing-Tianjin-Hebei region in northern China with the natural gas from the Power of Siberia system. The line is expected to be complete by 2025 and could transport 38 bcm per annum of gas.
OPEC+ has left the market in the state of uncertainty by delaying the decision on January's output. Oil prices dropped on Wednesday over these sentiments and a sudden build in oil inventories in the United States. Brent slipped by 0.9% and was traded at $47.01 a barrel. WTI decreased by 1% and was traded at $44.09 a barrel.
Oil prices dropped on Monday ahead of the OPEC+ meeting. Brent dropped by 1% and was traded at $47.72 a barrel. WTI slipped by 1.1% and was traded at $45.05 a barrel. The producer group met on Sunday but hasn't decided on oil output policy for 2021. Further talks will be held on Monday and Tuesday.
A weak dollar and recent vaccine progress lifted the spirit of the market on Friday. Brent increased by 0.6%, to $48.08 a barrel. WTI was down by 0.9%, to $45.31. However, JP Morgan stated, “While a successful vaccine rollout should break the link between infection and mobility, even then global oil demand will likely only reach its pre-pandemic run rate by mid-2022”.
Drop in crude inventories led to the increase in US oil on Thursday. This also resulted in a series of positive sentiments concerned with coronavirus vaccine and fuel demand. WTI increased by 0.3% and was traded at $45.85 a barrel. Brent crude futures were up by 0.4% and were traded at $48.81 a barrel.
"The recent breakthrough on a Covid-19 vaccine is a hope for the swift recovery of global energy demand next year. HSBC Bank analyst Gordon Gray recently stated-"The recent news around Covid-19 vaccines has boosted crude prices as markets start to look to a return to some sort of normality in 2021, also we expect OPEC+ to err on the side of caution as it evaluates how the market evolves.”
Saudi Arabia’s energy infrastructure-Saudi Aramco was attacked by a missile on a fuel depot in the Red Sea city of Jeddah. The authorities assured for no human casualties as well no oil products were lost. Houthi rebels in neighboring Yemen claimed responsibility for the attack. The strike was condemned by Saudi Arabia, stating-"terrorist and sabotage acts committed against vital installations target the security and stability of energy supplies to the world."
Successful coronavirus vaccine trials have helped the market extend the gains on Monday. Traders are looking for a substantial recovery in the demand of the crude. However, the gains were capped by the renewed lockdown in several countries. Brent increased by 0.5% and was traded at $45.17 a barrel. WTI gained 0.2% and was traded at $42.52 a barrel.