Oil degradation with quick COIVD-19 fears overshadowing vaccine development

© Reuters.

From Gina Lee

Investing.com – Oil was down in Asia Thursday morning as a busy year for the black liquid came to an end.

fell 0.37% to $ 51.44 by 10:43 p.m. (03:43 a.m. GMT) and fell 0.35% to $ 48.22.

The COVID-19 pandemic and the resulting stringent lockdowns resulted in around a fifth of the value of global crude oil markets being wiped out in 2020 and a shock starter going into negative territory for WTI futures in April as fuel demand subsided.

However, unprecedented stimulus measures by governments around the world helped prices rebound from these lows, with both Brent and WTI futures more than doubling from their lows in the first quarter of the year.

A ray of hope for investors before the turn of the year was better than expected. Data released Wednesday by the US Energy Information Administration (EIA) showed consumption of 6.065 million barrels for the week ended December 25th.

The draw was much larger than the 2.583 million barrel draw in predictions made by Investing.com as the 562,000 barrels draw the previous week.

The MSRP data follows Tuesday’s data, which showed a draw of 4.785 million barrels.

A third vaccine received regulatory approval. AstraZeneca (NASDAQ 🙂 COVID-19 vaccine, formerly AZD1222, developed by AstraZeneca PLC (LON 🙂 and Oxford University, received approval on Wednesday from the UK regulator of medicines and health products for the emergency care and active immunization of elderly people of 18 years of age or older. This adds a third vaccine to the governments arsenal after getting regulatory approvals for Pfizer Inc (NYSE 🙂 and BioNTech SE (F 🙂 vaccine BNT162b2 as well Modern Inc’s (NASDAQ 🙂 mRNA-1273 vaccine, earlier this month.

In Asia, China has approved BBIBP-CorV, one of the two COVID-19 vaccines from the China National Biotec Group.

However, concerns over immediate fuel demand regarding the spread of the new B177 strain of the COVID-19 virus and the resulting lockdowns are dampening investor sentiment.

On the supply side, data from Baker Hughes showed US energy companies added three oil and drilling rigs in the best quarter this week, adding to the number of rigs since Q2 2017.

The Organization of Petroleum Exporting Countries and Allies (OPEC +) will usher in the new year with a series of meetings to discuss easing the current production cuts.

The Cartel’s Joint Technical Committee and the Joint Ministerial Monitoring Committee will meet on January 3rd and 4th. The 13th OPEC and non-OPEC ministerial meeting is scheduled for January 4th. Current production cuts are expected to ease by 500,000 barrels a day in January.

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