Oil prices firm as reduction in supply overshadows demand worries
- Last updated: January 29, 2021 | 12:56
Gulf Today Report
Oil prices steadied on Friday, its past three weeks range as investors hope for change in supply and demand due to slow-paced of vaccine rollout.
Brent crude futures for March rose 4 cents, or 0.1%, to $55.57 a barrel while US West Texas Intermediate (WTI) crude futures slipped 7 cents to $52.27 a barrel.
Reduction in Saudi Arabia’s oil supply and US oil stocks has aided in offsetting price pressure from fuel demand.
Michael McCarthy, chief strategist at CMC Markets said: "even the currency effects that have been an occasional driver of the market have dried up with the US dollar also very stable at current levels."
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Saudi Arabia is working towards reducing output by 1 million barrels per day (bpd) in February and March.
According to Commonwealth Bank analyst Vivek Dhar, the Saudi cut effectively means OPEC+ supply cuts will rise from 7.2 million bpd in January to 8.125 million bpd in February.
A drawdown in US oil inventories are helping to support the market, however, market gains have been capped by worries about stalled vaccine rollouts and the spread of contagious new variants of the coronavirus.