After U.S. President Donald Trump backed down from a threat to block a $2.3 trillion package to counteract a coronavirus-driven economic downturn, Democrats on Monday will try to push through larger $2,000 relief payments. Europe on Sunday began a mass COVID-19 vaccination drive.
“The signing of the bill was very exciting, and it seemed to give the market a little bit of momentum,” but concerns about oil demand and inventories kept prices flat, said Phil Flynn, senior analyst at Price Futures Group in Chicago.
Brent crude fell 7 cents to $51.22 a barrel at 1:40 p.m. EST (1840 GMT), after trading as high as $52.02 earlier in the session. U.S. West Texas Intermediate (WTI) crude shed 23 cents to $48.00.
Oil has recovered from historic lows hit this year as the pandemic hammered fuel consumption. But the emergence of a new variant of the virus in the United Kingdom has led to movement restrictions being reimposed, hitting near-term demand and weighing on prices.
Oil remains vulnerable to any further setbacks in efforts to control the virus, Stephen Innes, chief global market strategist at Axi, said in a note.
A Jan. 4 meeting of the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, also looms over the market.
“While much focus will remain on the demand side of the global oil balances this week and into the new year, the supply side of the equation will be garnering more attention next month after OPEC + cranks up its production allowances,” said Jim Ritterbusch of Ritterbusch and Associates in Houston.
The group is tapering record oil output cuts made this year to support the market.
OPEC+ is set to boost output by 500,000 barrels per day in January and Russia supports another increase of the same amount in February.
Meanwhile, U.S. crude oil stockpiles were seen declining last week, while refined products inventories likely rose, a preliminary Reuters poll showed on Monday. [EIA/S]
Additional reporting by Alex Lawler, Koustav Samanta and Naveen Thukral; Editing by Jason Neely, Mark Potter and Dan Grebler