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CORRECTED-Oil prices edge lower amid doubts over U.S. stimulus, rising coronavirus cases

CoronavirusJan 26, 2021 05:48
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(Corrects to show U.S. crude rose, not fell, in the previous
session)
TOKYO, Jan 26 (Reuters) - Oil prices eased on Tuesday,
giving up some of the previous session's gains, as hopes for
rapid approval of new U.S. economic stimulus faded while new
coronavirus infections around the world mount up.
Brent crude LCOc1 was down 15 cents at $55.73 by 0135 GMT,
having risen nearly 1% on Monday. U.S. crude was also lower,
dropping 5 cents to $52.72, after rising 1% in the previous
session.
Have recently hit 11-month highs, oil is caught between
lingering doubts over any recovery in demand as the pandemic
continues to rage, offset by optimism for more stimulus from the
newly installed Biden administration in the United States to
support economic growth as vaccines are rolled out.
But Biden administration officials are still trying to
convince Republican lawmakers of the need for more stimulus,
raising questions over when it will be approved. "Through 2021, major supply and demand risks remain that
threaten to jolt fundamentals into a much tighter or looser
market," Citigroup said in a note.
The bank cited the risk of higher supply if sanctions on
Iranian crude are lifted, or U.S. drillers boost output from
shale, against a bigger demand shock from the latest wave of
lockdowns and restrictions.
European nations have set tough restrictions to combat the
spread of the virus, while China is reporting rising new
COVID-19 cases, casting a pall over demand prospects in the
world's largest energy consumer. Still, there are areas where demand for oil remains strong.
In India, crude oil imports in December increased to their
highest level in more than two years as the easing of
coronavirus restrictions boosted economic activity. On the supply side, compliance by the Organization of the
Petroleum Exporting Countries and its allies on pledged oil
output curbs is averaging 85% in January, tanker tracker
Petro-Logistics said on Monday. The findings suggest the group
has improved compliance supply curb commitments. Also, output from the giant Tengiz field in Kazakhstan was
disrupted by a power cut on Jan. 17.

CORRECTED-Oil prices edge lower amid doubts over U.S. stimulus, rising coronavirus cases
 

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