Oil slips in breather after run to 9-month high as COVID-19 surge stokes demand fears

By Sonali Paul
MELBOURNE, Dec 18 (Reuters) - Oil prices eased on Friday but
stayed within touching distance of nine-month highs hit
overnight as soaring COVID-19 cases weigh on fuel demand and
U.S. lawmakers continue to battle over a $900 billion economic
stimulus package.
U.S. West Texas Intermediate (WTI) crude CLc1 futures
slipped 7 cents or 0.1%, to $48.29 a barrel at 0218 GMT, while
Brent crude LCOc1 futures fell 13 cents, or 0.3%, to $51.37 a
barrel.
Both contracts had climbed on Thursday, on optimism around
progress on a COVID-19 relief bill, strong Asian refining demand
and a slide in the U.S. dollar to a two-and-a-half year low.
With oil priced in dollars, a weaker greenback makes oil cheaper
in other currencies.
"We think markets are still overlooking the near-term demand
pressures of rising COVID-19 cases and COVID-19 restrictions in
the U.S. and Europe," Commonwealth Bank commodities analyst
Vivek Dhar said in a note.
Analysts said risk appetite was growing with the prospect of
an imminent U.S. stimulus deal, which would help fuel demand,
but lawmakers had yet to reach an agreement late on Thursday.
The continued rollout of vaccines is also helping protect
the market from steep falls.
The U.S. Food and Drug Administration was expected to grant
emergency use authorisation for Moderna Inc's MRNA.O
coronavirus vaccine after emergency use was endorsed by an
independent panel. ANZ Research said with U.S. COVID-19 infections hitting new
daily records, and restrictions tightening in Japan, pressure is
growing on the Organization of the Petroleum Exporting Countries
(OPEC), Russia and their allies, together called OPEC+.
OPEC+ plans to add 500,000 barrels per day of supply to the
market in January, in the first step toward returning 2 million
bpd to the market.
"While rising consumption in Asia and demand hopes linked to
a COVID-19 vaccine may help oil prices above this range ($50-$60
a barrel), we think OPEC+ sits on enough spare oil capacity to
keep any surge in oil prices in check," Dhar said.