Oil Mixed As Crude Inventories Decline

Oil Mixed As Crude Inventories Decline

The global oil benchmark, Brent crude, rose above $56 per barrel on Tuesday, buoyed by Saudi Arabia's plans to limit supply, offsetting worries that rising coronavirus cases globally would curtail fuel demand.

U.S. crude rose 1.1% to the highest since February 2020 at $53.90 a barrel, after opening at $53.29, and hit a low of $53.23, and Brent crude rose 1.2% to the highest since February at $57.40 a barrel, after opening at $56.71, and hit a low of $56.54.

US West Texas Intermediate (WTI) slipped 44 cents, or 0.8pc, to $51.80 a barrel.

Last week, the bank said Saudi Arabia's pledge to cut its output by more than required under its pact with other OPEC+ producers points to weakening oil demand following new COVID-19 lockdowns.

A preliminary Reuters poll has highlighted a fall in USA crude oil stockpiles for a fifth straight week, while refined products inventories increased last week.

Edward Maya, senior market analyst at OANDA Company, stated: "Brent sales declined in the market after Saudi Crown Prince Mohammed Bin Salman talked about Saudi Arabia's future beyond oil, and Iraq's decision to raise the price of its crude sales to Asia in February".

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US President-elect Joe Biden, who takes office on January 20 with his Democratic party in control of both houses of Congress, has promised "trillions" in extra pandemic-relief spending. Inventories are expected to decline by 3 million barrels, according to the median estimate of a Bloomberg survey for Wednesday's USA government storage report.

Futures rose further above $53 a barrel after the American Petroleum Institute was said to report that domestic crude stockpiles fell by 5.82 million barrels last week.

Many producers will be able to boost output and USA shale will be needed to fill the gap in the oil balance in the short term, IEA Director Fatih Birol said during a Bloomberg television interview.

Concerns about demand due to rising coronavirus cases worldwide limited gains.

Chinese authorities introduced new curbs in areas surrounding Beijing on Tuesday and Japan is to widen a state of emergency beyond Tokyo.

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