Oil prices were mixed on Tuesday as an impasse in output talks between key crude producers regarding changes to February supply forced the Organisation of the Petroleum Exporting Countries (OPEC) and its allies to shift the meeting to later in the day.
Brent crude futures for March declined by 6 cents or 0.1% to $51.03 per barrel at 08:26 West African Time, while United States West Texas Intermediate (WTI) crude for February went 1 cent up to $47.63.
Bonny Light, Nigeria’s premium oil grade, eased by 16 cents or 0.32% to $50.43 on Monday.
The oil prices of Brent and WTI contracts lost over 1% on Monday, following the inability of OPEC and its Russia-led allies, a cartel popularly called OPEC+, to reach a consensus on modifications to February’s output.
Saudi Arabia supported not pumping more oil on account of fresh lockdowns but Russia stood at the forefront of clamour for bigger supply, saying demand was improving.
“OPEC+ drama is of course steering the latest oil price downgrade, but the heavier hand is likely the still unknown impact of the new strain on economic activity and travel – both factors that warrant a belated mini-price correction after the winter holidays,” Rystad Energy’s Louise Dickson said.
England began a new lockdown on Monday, following a soaring in COVID-19 cases, which came after the discovery a variant of the coronavirus.
“Near-term demand growth is stalling due to the resurgence of Covid-19 across North America, Europe and the Middle East and is likely set for deeper declines over the next several months,” said Fitch Solutions.
“This adds to our view for neutral to bullish prices across most of 2021 with difficult conditions to persist through the first half of the year,” Fitch added, noting that the oil price of Brent was anticipated to average $53 a barrel this year.
Oil prices also drew strength from the escalating tensions in the Middle East.
On Monday, the Iran’s Revolutionary Guards Corps confiscated a South Korean-flagged tanker in Gulf waters and held its crew, following a feud between Seoul and Tehran concerning Iranian funds blocked in South Korean banks due to U.S. sanctions.
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