Oil dips as soaring COVID-19 cases dampen vaccine hope; Bonny Light gains $1.53

Oil prices weakened Thursday, with an uptick in COVID-19 infections and stricter curbs on economies around the world fuelling worries over weaker fuel demand, casting shadow on optimistic vaccine reports.

Brent crude, the benchmark for Nigerian oil, inched down by 39 cents or 0.88% to $43.95 at 11:02 West African Time while West Texas Intermediate (WTI) slipped by 56 cents, or 1.34%, to $41.26 per barrel.

Bonny Light, Nigeria’s top crude grade, jumped $1.53 or 3.57% to $44.39 a barrel at the previous session. Qua Iboe, another major national grade, was up by 42 cents or 0.98% at $43.44 a barrel in early trade on Thursday.

Brent and WTI appreciated by 1.4% and 1% in that order on Wednesday.

The chief analyst at Fujitomi Co told Reuters, Kazuhiko Saito, told Reuters that “the spread of coronavirus infection and fresh restrictions in the United States and other parts of the world hit market sentiment as it would hamper fuel demand.”

“Investors are also booking profits from the recent rally before the U.S. Thanksgiving holiday later this month,” he added.

The fatalities in the United States from COVID-19 rose past 250,000 on Wednesday, with New York City’s public school system, the biggest in the country, ending teaching inside classrooms over a leap in coronavirus infection rates.

Read also: Oil prices climb on hints of OPEC+ output increase delay, Bonny Light loses $0.97

Tokyo, the capital of Japan, reported its biggest coronavirus alert level on Thursday, putting the daily count of fresh cases on course for a horrid milestone of over 500 while its governor said the situation could exacerbate except measures were deployed.

After reporting a further 23,610 cases and 463 coronavirus-linked deaths, Russia exceeded 2 million cases.

Fears of economic damage from the pandemic toned down the optimism around the news from Pfizer and BioNTech, two firms expecting the U.S. and Europe to grant approval to their COVID-19 vaccines in December.

“Weaker global equities amid growing worries over the surging pandemic also bolstered fears over slowing consumption and fuel demand,” Satoru Yoshida, commodity analyst at Rakuten Securities, said.

National Oil Corporation in Libya and France’s Total held talks on the former’s move to lift capacity and enlarge production rates to optimum levels, raising fears of oversupply.

The Organisation of the Petroleum Exporting Countries (OPEC) and its allies, commonly known as OPEC+ plans to deliberate on policy at a full ministerial meeting scheduled for 30^th November and 1^st December.

OPEC+ members might call off the current proposal to stimulate shore production up in January by 2 million barrels per day, sources told Reuters.

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