By Gina Lee
Investing.com – Oil was up Monday morning in Asia, recovering losses from earlier in the session. However, fuel demand worries from 2020 remain as the COVID-19 pandemic continues to rage on into 2021 and Japan considers declaring a new state of emergency after seeing record numbers of COVID-19 cases.
Brent oil futures jumped 1.08% to $52.36 by 11:06 PM ET (4:06 AM GMT) and WTI futures rose 1.03% to $49.02. A weak dollar also continued to give the black liquid a boost.
The Organization of the Petroleum Exporting Countries and allies, or OPEC+, will continue a series of meetings to discuss easing current production cuts. The cartel’s Joint Technical Committee met on Jan. 3 and its Joint Ministerial Monitoring Committee and 13th OPEC and non-OPEC Ministerial Meeting is scheduled to take place later in the day.
OPEC Secretary General Mohammad Barkindo said on Sunday that while crude demand is expected to rise by 5.9 million barrels per day (bpd) to 95.9 million bpd this year, OPEC sees plenty of downside demand risks in the first half of 2021.
The production cuts put in place by the group as the spread of COVID-19 saw fuel demand tank eased by 500,000 barrels per day in January, with the level to be reviewed monthly.
“We are only beginning to emerge from a year of deep investment cuts, huge job losses and the worst crude oil demand destruction on record,” Barkindo warned.
Energy Aspects and RBC Capital analysts expect OPEC+ to maintain January production levels in February.
“We think the producer group will opt to forgo any further production increases for February with Covid-19 cases continuing to climb and the slower than expected vaccine rollout,” RBC Capital Markets LLC chief commodities strategist Helima Croft told Bloomberg.
On the supply side, U.S. crude oil production remained under pressure from weak prices and tepid demand, and was down more than 2 million barrels per day (bpd) in October from earlier this year, according to a Jan. 1 government report.