Oil futures held steady, despite a stronger dollar and physical prices in Asia continuing to trade at weaker levels than a month ago.
Premiums for Russia’s ESPO have fallen by more than $1 since last month, according to traders who asked not to be identified. It follows a flurry of new Covid cases in China, potentially menacing demand, and flare ups in other regional oil consumers like Japan.
Indian energy demand was also off to a shaky start to the year, with sales of transport and cooking fuels dropping from a month earlier.
While a second consecutive daily rise in the dollar was adding pressure to prices on Monday, not all data was so downbeat. Chinese refiners processed a record volume of crude in December, the equivalent of about 14 million barrels a day, a sign of just how strongly consumption in the world’s largest crude importer had
rebounded into the end of
Combined with Opec+ output cuts, the rollout of Covid vaccines had helped push prices to a 10-month high at the start of the year.
“The virus will be beaten, and the foundation of economic recovery was laid down in the second half of last year,” said Tamas Varga, an analyst at PVM Oil Associates Ltd. As a result, the pullback in prices “might prove to be short-lived,” he said.