12 Jan 2021
Oil prices increased on Tuesday on predictions of a drawdown in U.S. crude oil inventories for the fifth consecutive week.
However, investor concerns over mounting coronavirus cases capped price gains across the globe.
Reuters reports Brent crude oil futures rose 22 cents, or 0.4%, to $55.88 a barrel, while U.S. West Texas Intermediate (WTI) increased 25 cents, or 0.5%, to $52.50 a barrel.
According to Stephen Innes, chief global market strategist at Axi: “I think the market will be rapid to conclude that yesterday’s modest pullback in price, provided the virus spread in China remains contained, was but a blip on the radar screen,” citing the possibility of increased economic stimulus in the U.S.
“Trillions” of dollars have been promised by U.S. President-elect Joe Biden in additional extra pandemic-relief spending.
Stockpiles of U.S. crude oil likely declined for the fifth week on the bounce, while refined products inventories rose last week, according to the results of a preliminary Reuters poll.
The poll was carried out before reports are published from the American Petroleum Institute on Tuesday and the Energy Information Administration (EIA) on Wednesday.
According to Goldman Sachs, Brent could rise to $65 per barrel by summer this year, fuelled by Saudi output cuts and the Democrats coming into power in the U.S.
Goldman Sachs previously forecast oil would hit $65 by the end of the year.
Global coronavirus cases have hit 90.9m as countries around the world rush to acquire vaccines and continue or reimpose lockdowns to fight new variants of the virus.