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A woman wearing a mask walks in front of the ocean as tankers are seen anchored off the coast of Long Beach, California, after sunset on April 25, 2020.
Apu Gomes | AFP | fake images
Oil rose on Tuesday as optimism over the launch of coronavirus vaccines offset tighter lockdowns in Europe and forecasts for a slower recovery in demand.
The United States began vaccinating people on Monday when the death toll from COVID-19 in the country crossed the 300,000 mark. Britain and Canada have also started giving injections.
US West Texas Intermediate (WTI) crude closed up 63 cents, or 1.34%, at $ 47.62. Brent crude rose 41 cents, or 0.8%, to $ 50.70 a barrel.
Oil prices have rebounded in recent weeks, with Brent reaching $ 51.06 on December 10, its highest level since March, supported by hopes of a recovery in demand. Prices had fallen to record lows in March when the pandemic took hold.
“Brent continues to defy all the negative news,” said Carsten Fritsch, an analyst at Commerzbank. “More and more countries in Europe and states in the US are tightening restrictions on the crown during Christmas and the New Year, which will likely affect demand.”
London stepped up pandemic restrictions requiring bars and restaurants to close, Italy is considering stricter measures over Christmas, and Germany is likely to be on lockdown until early 2021.
Forecasters are also slashing demand figures. The International Energy Agency said Tuesday that any impact from on-demand vaccines is several months away. OPEC had said on Monday that demand for oil will rise more slowly than expected.
“There is growing agreement among forecasting agencies that the improvement in global oil demand may not start early next year but in the second half,” said Tamas Varga of oil brokerage PVM.
The latest snapshots of US oil supplies are expected to show a mixed picture, with gasoline and distillate stocks rising and crude inventories falling.
The first of two US inventory reports this week, from the American Petroleum Institute, is due at 2130 GMT (4:30 pm EST).
