U.S. West Texas Intermediate crude ended 1 cent higher at $52.25 per barrel. International benchmark Brent crude dropped 33 cents, or 0.6%, to end at $55.66 per barrel.
Commerzbank analyst Eugen Weinberg stated that the repeated worries regarding demand due to too high numbers of new COVID-19 cases and additional mobility constraints, plus the more powerful U.S. dollar, are creating selling pressure.
Global COVID-19 cases exceeded 90 million, as stated by a Reuters poll.
Notwithstanding severe national lockdowns, Britain is suffering the worst weeks of the epidemic, and in Germany, cases are still growing.
Mainland China marked its most significant daily rise in virus infections in longer than five months, announced as new diseases spread in Hebei, encompassing Beijing’s capital. In Shijiazhuang, the provincial capital and epicenter of the latest outbreak, people and vehicles are prohibited from moving as authorities attempt to rein in the spread.
A more robust dollar, helped by hopes for more stimulus to support the world’s biggest economy, also showed oil prices. Oil is typically valued in dollars, so a more robust dollar makes crude more costly for buyers with different currencies.
Monday’s damages follow an intensive week for oil prices. Brent and WTI increased about 8% last week, backed by Saudi Arabia’s commitment for a deliberate oil production cut of 1 million barrels per day (BPD) in February and March as a component of a deal for most OPEC+ producers to keep production constant.
Bjornar Tonhaugen, Rystad Energy’s head of oil markets, stated that although oil prices are failing today, the Saudi move keeps them at moderately high levels. Today, the change is not large, somewhat a reasonable modification induced by some bearish demand signals and a strengthening U.S. dollar.
The Saudi cut is anticipated to bring the oil market into shortage for most of 2021 even though lockdowns are crashing demand, analysts stated.
Brent could advance to $65 by the barrel in summer 2021, Goldman Sachs declared, encouraged by Saudi production cuts and the indications of a difference in power to the Democrats in the United States.