Rising oil price on Expectations of Stockpiles Drawdown And Virus Fears

Oil prices rose today, Tuesday, thanks to expectations of a drawdown of crude stocks in the United States for the fifth week in a row, but investors worried about the increase in cases of Coronavirus around the world curbed price gains.

Brent crude futures rose 22 cents, or 0.4%, to $ 55.88 a barrel, while U.S. West Texas Intermediate crude futures gained 25 cents, or 0.5%, to $ 52.50 a barrel.

And the US President-elect Joe Biden, who will take office on January 20, with his Democratic Party controlling the two houses of Congress, promised “trillions” of additional spending to mitigate the repercussions of the Corona pandemic.

A preliminary Reuters poll showed on Monday that US crude oil inventories are likely to decline for the fifth week in a row, while oil product inventories are expected to rise last week.

The opinion poll was conducted ahead of a report from the American Petroleum Institute due for release later today and the report of the US Energy Information Administration, the statistical arm of the US Department of Energy, to be released on Wednesday.

Goldman Sachs said Brent could rise to $65 a barrel by the summer of 2021, driven by Saudi cuts and the effects of a power shift in favour of Democrats in the United States. The investment bank had previously expected oil to reach $65 by the end of the year.

A Reuters statistics showed that infection with the Coronavirus worldwide has exceeded 90 million, at a time when countries around the world rush to produce vaccines and continue to extend or re-impose comprehensive general isolation measures to combat a new strain of the virus.

In Asia, Japan intends to expand the state of emergency outside its capital, Tokyo, to combat the spread of Covid-19, while China applies restrictions on movement in some parts of the country.