Oil dropped for second day in a row on Tuesday with January contracts for U.S. light crude oil WTI dropped on NYMEX by -0.26 percent to settle at $45.48 per barrel on the day.
The coronavirus vaccination that has already started in the UK, as well as the certification of a vaccine developed by Pfizer/BioNTech in the United States, which is expected on Thursday, are among the positive factors for the oil market. Distribution can begin within the next 24 hours if the vaccine is approved.
The short-term energy market assessment released by the U.S. Energy Information Administration (EIA) yesterday is also worth noting. The report stated that the downturn in economic activity linked to the COVID-19 pandemic has triggered changes in the supply and demand structure of the oil market in 2020 and will continue to impact these developments in the future. By the end of this year, the EIA expects global consumption of oil to hit 92.4 million barrels per day, which is 8.8 million barrels per day lower than in 2019. The Agency is predicting a demand growth of 5.8 million barrels per day in 2021. Oil prices will be boosted by the demand recovery: next year, the EIA expects the average price of Brent crude to be $49 per barrel, $6 more than the estimated price for the fourth quarter of 2020.
In terms of oil market statistics, data from the American Petroleum Institute (API) on oil reserves in the United States also released today. Inventories rose by 1.141 million barrels for the week ended December 4, compared with an increase of 4.146 million barrels a week earlier, although analysts predicted a decrease of 1.514 million barrels.
The EIA’s official statistics on oil reserves in the U.S. will also be released today which will be the point of focus of the investors in the sessions today.