Oil prices decline as global Covid-19 infections increase

12 January 2021 (Last Updated January 12th, 2021 09:49)

Oil prices have witnessed a fall as investors remained worried about increasing Covid-19 infections worldwide.

Oil prices decline as global Covid-19 infections increase
A preliminary Reuters poll has highlighted a fall in US crude oil stockpiles for a fifth straight week. Credit: ArtTower / Pixabay.

Oil prices have witnessed a fall as investors remained worried about increasing Covid-19 infections worldwide.

Brent crude oil futures edged down $0.10 to $55.56 a barrel, while US West Texas Intermediate (WTI) declined $0.08 to $52.17 a barrel, Reuters reported.

A tally by the news agency revealed that globally Covid-19 cases surpassed 90 million on 11 January.

To fight the new variants of the virus, countries around the world are scrambling to buy vaccines and continue to extend lockdowns or plan to implement them again.

A state of emergency beyond Japan’s capital Tokyo is expected to be widened to contain the spread of Covid-19, while movement kerbs are being implemented in some parts of China.

Axi chief global market strategist Stephen Innes said: “I think the market will be rapid to conclude that yesterday’s modest pullback in price, provided the virus spread in China remains contained, was but a blip on the radar screen.”

Losses are kept in check due to expectations of a drawdown in US crude oil inventory for a fifth straight week.

US President-elect Joe Biden is set to take office on 20 January and has promised ‘trillions’ in extra spending as relief during the pandemic.

A preliminary Reuters poll has highlighted a fall in US crude oil stockpiles for a fifth straight week, while refined products inventories increased last week.

This poll was conducted ahead of reports from industry group American Petroleum Institute and the US Department of Energy’s statistical arm Energy Information Administration (EIA).