Oil prices rose on Monday after a weak start, adding to the gains of the last three months, although patchy coronavirus vaccine rollouts, new infections and the discovery of new variants are casting a shadow over the demand outlook.
Brent crude futures were up 53 cents, or 1, at 55.57 a barrel by 0756 GMT, while U.S. West Texas Intermediate WTI gained 41 cents, or 0.8, to 52.61. Both benchmarks gained nearly 8 in January.
Oil prices have been boosted by vaccination programmes getting underway in hardhit countries and output cuts by major producers like Saudi Arabia. But euphoria over a possible end to the pandemic has been undermined by the slow pace of vaccinations and the rise of new variants of the coronavirus.
Still, with more vaccines proving successful in trials and infections falling in some areas, demand for oil and fuel is likely to pick up as more of the worlds population gets inoculated against COVID19.
Our basecase remains for a demandled rebalancing of the oil market, with the logistical challenges of vaccination likely transient and evidence of still elevated vaccine efficacy, Goldman Sachs said in a new report, while noting that the rally of recent weeks had paused.
Oil prices are expected to remain around current levels for most of this year before a recovery gains ground towards the end of 2021, a Reuters poll showed late on Friday.
U.S. oil and gas drillers are gearing up for a pickup in demand and as higher prices make new wells profitable again,…