Brent Crude Hits 10-Month High, Trades $52 Per Barrel 

December 19, 2020
brent crude oil

By Adedapo Adesanya

The price of Brent crude oil reached $52 per barrel for the first time since February on Friday as efforts to pass another virus relief package in the United States added to optimism that the vaccine’s rollout will provide a long-awaited boost to demand.

Yesterday, the price of the international crude benchmark improved by 76 cents or 1.48 per cent to sell at $52.26 per barrel while the US futures, West Texas Intermediate (WTI) crude, made a 1.53 per cent or 75 cents gain to trade at $49.10 per barrel.

Talks in the US for relief package have made some headway, with the Senate Majority Leader, Mr Mitch McConnell, saying he’s even more optimistic now that an agreement was near.

Also, the recent progress in rolling out a COVID-19 vaccine has buoyed the outlook for consumption, outweighing the various bearish news hitting the market.

The US launched its vaccination campaign against COVID-19 this week and this buoyed hopes that pandemic restrictions could end soon and lift demand at the world’s largest oil consumer.

However, investors are still keeping eyes on happenings in Europe as countries on the continent have continued to lock down major cities to curb the spread of COVID-19, thereby reducing fuel demand.

Germany, the fourth-largest economy in the world, plans to impose stricter lockdowns from next Wednesday to battle the virus.

The Italian government announced new lockdown over Christmas. Bars, restaurants and non-essential shops are to close nationwide from December 24 to 27 and December 31 through January 3, 2021.

Austria will go into lockdown for the third time after Christmas, the government confirmed, just 11 days after the country’s second lockdown ended.

In the United Kingdom, Turkey, France, Sweden, cases are also rising with governments considering yet another stricter restrictive methods.

The market has to contend with Libya’s crude oil production which continues to increase as one of its companies has nearly doubled its output to 100,000 barrels per day compared to production levels before the blockade of Libyan oil ports and oilfields in January.

The faster-than-expected increase in Libyan oil production, after an eight-month-long blockade, is giving the Organisation of the Petroleum Exporting Countries (OPEC) and its allies another issue to discuss at their monthly meetings, on top of the outlook for oil demand early next year.

OPEC is set to lift production by 500,000 barrels per day next year but expects global oil demand to fall by 9.77 million barrels per day this year to 89.99 million barrels per day while expectations for 2021 was put at 95.89 million barrels per day

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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