© Reuters. FILE PHOTO: The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County
By Sonali Paul and Shu Zhang
MELBOURNE / SINGAPORE (Reuters) – Oil prices fell on Friday but remained close to the nine-month highs reached in the previous session as rising COVID-19 cases weigh on fuel demand and US lawmakers fight for a $ 900 billion economic stimulus package.
US West Texas Intermediate (WTI) Crude Oil futures slid 17 cents, or 0.4%, to $ 48.19 a barrel at 0513 GMT, while futures were down 26 cents, or 0.5%, at $ 51.24 per barrel.
According to a Reuters tally on Friday, more than 73.65 million people have been infected with the novel coronavirus globally and 1,654,920 have died.
The spike in cases is leading to tight travel restrictions, weighing on short-term fuel demand and market sentiment, analysts said.
Both contracts rose Thursday, on optimism about progress on a COVID-19 relief bill, strong Asian refining demand and a drop in the US dollar to a two-and-a-half-year low. With the price of oil in dollars, a weaker greenback makes oil cheaper in other currencies.
Analysts said risk appetite was still growing with the prospect of an impending US stimulus deal, which would help fuel demand, but lawmakers still had to reach a deal late Thursday.
The continued introduction of vaccines also helps protect the market from sharp drops.
The US Food and Drug Administration was supposed to grant emergency use authorization for Modern (NASDAQ 🙂 Inc’s coronavirus vaccine after emergency use has been approved by an independent group.
ANZ Research said that with U.S. COVID-19 infections reaching new daily records and tightening of restrictions in Japan, pressure is mounting on the Organization of the Petroleum Exporting Countries (OPEC), Russia and their countries. allies, together called OPEC +.
OPEC + plans to add 500,000 barrels per day of supply to the market in January as a first step towards returning 2 million barrels per day to the market.
“Although OPEC + has shown that it is ready and willing to adapt to changing market conditions, which should protect the value of crude over the long term, short-term challenges may still weigh on the recent bullish momentum,” he wrote in a note from OANDA analyst Craig Erlam.
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