Roseland Oil & Gas issued the following announcement.
Oil fell toward $47 a barrel after dropping the most since early November on Monday as a faster-spreading strain of the coronavirus discovered in the U.K. raised the risk of more lockdowns and less global travel.
Futures in New York for February delivery are down more than 4% so far this week. Many countries have suspended travel with the U.K., where more than 16 million people are now required to stay at home. A resurgence of the virus gathered pace in Asia, with Taiwan recording its first locally transmitted infection since April and a cluster of cases swelling in Sydney. A stronger dollar also reduced the appeal of oil that’s priced in the currency.
The Covid-19 mutation is stoking concerns that more parts of the world may face renewed restrictions on movement, curbing a recovery in global energy demand. On the supply side, Russia said it intends to support a further increase in OPEC+ production in February at the group’s meeting next month.
Crude has surged more than 30% since the end of October, in part due to a series of vaccine breakthroughs, but the likelihood of additional stay-at-home measures is now threatening the rally and also weakening oil’s forward curve. Brent’s prompt timespread has moved back into contango, a bearish market structure where near-term prices are cheaper than later-dated ones.
“Although we’ve been on a strong upward trend in the last two months, a pullback in prices that we were expecting next year has already started,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. “The new strain of the virus is the straw that broke the camel’s back” and $50 to $52 a barrel is as high as Brent will go for now, he said.
| Prices |
| West Texas Intermediate for February delivery dropped 1.8% to $47.09 a barrel on the New York Mercantile Exchange as of 7:46 a.m. in LondonThe January contract fell $1.36 as it expired MondayBrent for February dropped 1.6% to $50.12 on the ICE Futures Europe exchange after closing down 2.6% on Monday |
Physical oil prices are also cooling as Asian refiners ease purchases after an earlier-than-usual buying spree. Abu Dhabi’s Murban crude was sold last week on the spot market below its official price for the first time since August, while differentials for Russia’s ESPO and Urals have also slumped.
The Senate and the House passed a $900 billion Covid-19 relief plan that’s expected to boost energy demand in the world’s largest economy. The legislation will now go to President Donald Trump, who aides said would sign it when it arrives at the White House this week.
| Other oil-market news |
| Oil prices may be surging and Asian fuel consumption recovering, but for the region’s refiners the short-term outlook remains grim.Europe’s air traffic is still only about half what it was when the continent’s national lockdowns began, but tightening supply has propelled a keenly watched jet fuel price marker to where it was when Covid-19 first hit.Diamondback Energy Inc. rounded off a tumultuous year for the U.S. shale industry with the acquisition of two rivals for about $1.4 billion that will expand its position in the Permian Basin. |