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Oil treads warily higher amid patchy vaccine rollouts, new coronavirus variants

Published 02/01/2021, 10:36 AM
Updated 02/01/2021, 10:40 AM
© Reuters.
LCO
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CL
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TOKYO, Feb 1 (Reuters) - Oil prices edged higher on Monday
after a weak start, holding on to the past three months of
gains, although patchy coronavirus vaccine rollouts, new
infections and the discovery of new variants are keeping a lid
on prices.
Brent crude futures LCOc1 were up 10 cents at $55.14 a
barrel by 0233 GMT, while U.S. West Texas Intermediate (WTI)
CLc1 gained 1 cents to $52.21. Both benchmarks gained nearly
8% in January.
Oil prices have been boosted by vaccination programmes
getting underway in hard-hit countries and output cuts by major
producers like Saudi Arabia. But euphoria over a possible end to
the pandemic has been undermined by the slow pace of
vaccinations and the rise of new variants of the coronavirus.
Still, with more vaccines proving successful in trials and
infections falling in some areas, demand for oil and fuels is
likely to pick up as more of the world's population gets
inoculated against COVID-19.
"Demand will recover across the board, led by Asia-Pacific
and North America," FitchSolutions said in a research note.
"Europe and Latin America will lag, largely a reflection of
softer economic recovery in key markets in these regions," it
said.
Oil prices are expected to remain around current levels for
most of this year before a recovery gains ground towards
year-end, a Reuters poll showed late on Friday. U.S. oil and gas drillers are gearing up for a pickup in
demand and as higher prices make news wells profitable again,
adding rigs for a sixth month in a row in January. RIG/U
U.S. output is rising and was above 11 million barrels per
day in November for the first time since April, according to the
Energy Information Administration.


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