social networks access
  • Twitter
  • flickr
Connect to T&B
  • ver todas
  • Rss
announcer section
  • nnounce on the site
  • nnounce on the magazine

Oil closes in fall with fears about covid-19 advance in China

01/18/2021 | 16h21

Oil futures traded sharply on Friday, with U.S. prices set to erase their week's gain, with investors assessing news of new covid-19 outbreaks in China, which has been a demand driver while other large economies were slowed by the coronavirus pandemic.


"The euphoria of the oil market is unmistakably strong, but Asian market indicators are mixed," said Michael Tran, an analyst at RBC Capital Markets, in a note.


"China, the global engine of growth in oil demand, is battling new outbreaks and blockades of COVID in various regions of the country that have led to a reduction in discretionary driving standards," he said.


Barron's reported that China saw 107 cases of coronavirus transmitted locally on Wednesday, according to its National Health Commission, the largest since July. On Tuesday, there were 85 cases. While the numbers look small compared to large daily counts in the thousands in the U.S. and elsewhere, they come after China had a long period with few outbreaks after a rigid blockade last year.


Ninety percent of the new cases occur in Hebei province, which surrounds Beijing, which created a rapid blockade that left 28 million people quarantined in homes or hotels, the commission said.


The global count of confirmed cases of the coronavirus that causes COVID-19 rose above 93 million on Friday, according to data aggregated by Johns Hopkins University, while the death toll rose above 1.99 million. The US has the highest number of cases in the world, 23.3 million, and the highest number of deaths, 388,705, or more than a quarter of the global total.


In this context, West Texas Intermediate oil for February delivery CL.1, -2.41% CLG21, -2.41% fell $ 1.49, or 2.8%, to $ 52.08 a barrel in New York Mercantile Exchange. Prices based on the first month's contract closed on Thursday at their highest level since February last year, but the US benchmark is now on track to record a 0.3% weekly decline.


March Brent oil BRN00, -2.36% BRNH21, -2.36%, the global benchmark, fell $ 1.58, or 2.8%, to $ 54.84 a barrel on ICE Futures Europe, which drives for a weekly drop of 2.1%.


"Oil had a resilient run in the first weeks of 2021," said James Hatzigiannis, chief market strategist at Ploutus Capital Advisors. "However, it is now approaching overbought levels."


This week, "we saw reports of a reduction in the surplus of crude oil, an increase in refinery activity and increased demand for gasoline, all optimistic developments for oil," he told MarketWatch, but oil prices "rose very quickly, a correction is overdue. All bullish developments have been evaluated. "


Chinese demand may decline, said Hatzigiannis, because the country "strategically increased its reserves" in 2020, when oil prices were historically low.


Meanwhile, some predictions indicate that travel in the United States "will not return until the third quarter of this year," he said, adding that he expects to see a significant increase in demand for oil sometime in late spring, when infections are due to begin. to decrease significantly.


Demand is also expected to take a "slight jump" from President-elect Joe Biden's new $ 1.9 trillion stimulus package.


For WTI, "$ 50 is a big psychological price level" and "a big bearish development would be needed for oil to fall below that level," said Hatzigiannis.


Given the "combination of Saudi Arabia's commitment to managing supplies and indications that we are starting to see light at the end of the tunnel with respect to infections, I think we will be above $ 50 in the long run," he said.


Oil products traded on Nymex fell along with oil in Friday's trading. February gasoline RBG21, -1.67% lost 1.9% to $ 1.5246 a gallon, with prices trading around 1.1% lower for the week, while February HOG21 heating oil, - 1.82% fell 2.3% to $ 1.5811 a gallon, prepared for a weekly increase of about 0.1%.


February NGG21 natural gas, 2.33%, was traded at $ 2.753 per million British thermal units, up 3.2% on the floor and 1.9% higher on the week.

Font: T&B Petroleum/Boletim SCA
Your Name:

Your E-mail:

Friend's Name:

Friend's E-mail: