Oil rises above $56 as tighter supply offsets coronavirus concern

Oil rises to highest since Feb, set for weekly gain on Saudi output cut

Oil rises to highest since Feb, set for weekly gain on Saudi output cut

Rising coronavirus infections weigh heavily on oil prices. Oil is usually priced in dollars, so a stronger dollar makes crude more expensive for buyers with other currencies. The oil report pointed to a 5.82-million-barrel decline in inventories for the week ending January 8th, compared to a baseline forecast of a 1.66-million-barrel drop.

Oil prices hit their highest level in almost a year and were on track for a weekly gain on Friday, supported by Saudi Arabia's pledge to cut output and strong gains in major equity markets.

Brent crude oil prices fell by $1 per barrel on Monday, hit by renewed concerns about global fuel demand amid tough coronavirus lockdowns in Europe and new curbs on movement in China, the world's second-largest oil user, where infections jumped.

"Brent is underperforming after Crown Prince Mohammed bin Salman revealed Saudi Arabia's future beyond oil and Iraq increased their pricing for crude sales to Asia in February", said Edward Moya, a senior market analyst at OANDA.

The near-term energy demand outlook, however, is still overshadowed by tightening border restrictions and lockdowns around the globe, as more cities and states are facing a new wave of new coronavirus strains that were reported to be more transmissible than the original type.

'Locked up': Indian team slam Brisbane hotel 'prison'
We have begun our preparations for the final Test at the Gabba! "Are they humans or machines", BCCI members told the publication. It has been assured that there will be room service and house keeping, ' a senior BCCI official told the Times of India .

Shijiazhuang, the provincial capital and epicentre of the new outbreak, is in lockdown, with people and vehicles barred from leaving, as authorities seek to rein in the spread. South Korea's December unemployment rate unexpectedly hit a 10-year high due to the pandemic's impact.

The poll was conducted ahead of reports from industry group American Petroleum Institute later on Tuesday and the Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, on Wednesday.

Oil also gained on the expectation of a further drop in USA crude stockpiles. If inventories continue to decline towards their normal levels, oil will get additional support.

Monday's losses follow a strong week for oil prices.

Technically, WTI breached above a key chart resistance of US$ 50.0 and has since opened the door for further upside potential with an eye on US$ 54.6 - the previous high observed in end February 2020.

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