Oil Prices Mixed, But IMF Predicts Vaccine-Fuelled Demand Growth Recovery

Meanwhile, no more Trump is proving good for Iran exports: File Image/Pixabay

Crude trading on Tuesday was mixed due to the familiar worries over Covid infection rates and indecision surrounding the highly-anticipated $1.9 trillion White House pandemic relief package – but that didn't prevent some analysts from predicting an upswing in demand growth for 2021.

Brent ended Tuesday's session up 3 cents at $55.91 per barrel, while West Texas Intermediate fell 16 cents to settle at $52.61.

As U.S. democrats were reportedly trying to convince republicans of the need for more stimulus than already proposed, Robert Yawger, director of energy futures at Mizuho Securities USA, remarked, "Big COVID numbers, vaccine struggles, and uncertainty surrounding the stimulus plan, are all conspiring to pressure prices."

He was referring to reports that compared to the U.S., the U.K., and other countries, vaccine roll-out in the European Union has been slow.

Still, with over 69 million people already vaccinated globally and the rate expected to escalate in coming days and weeks, the analytical community is still hopeful for a healthy demand recovery in coming months, and this was reflected by the International Monetary Fund predicting global growth of 5.5 percent this year, an increase of 0.3 percentage points from the October forecast.

Trading was also impacted on Tuesday by reports that two supertankers, with crew members from Iran and China, were seized on Sunday in Indonesian waters near Kalimantan island for suspected illegal oil transfers.

Bjornar Tonhaugen, head of oil markets at Rystad Energy, said, "Prices are likely to hold back if the Indonesian vessel seizure gets resolved quickly."

Meanwhile, the end of the Donald Trump presidency is being cited for a change in buyer behaviour with regard to Iran: SVB International and two other firms estimated that exports from the Islamic republic are rising: 710,000 barrels per day (bpd) were exported in December compared to 490,000 bpd in October, and preliminary figures in January are maintaining the upward trajectory.