Economy

Saudi Aramco cuts Feb crude supply to some Asian refiners, sources say

Saudi Aramco cuts Feb crude supply to some Asian refiners, sources say”

Most OPEC+ producers will hold production steady in the face of new coronavirus lockdowns.

U.S. West Texas Intermediate (WTI) was up 40 cents, or 0.8%, at $53.61 a barrel by 0128 GMT after gaining almost 2% on Tuesday.

Brent crude, against which Nigeria's oil is priced, was up 95 cents, or 1.7 per cent, at $56.61 per barrel as of 8:55pm Nigerian time on Tuesday after touching its highest since last February at $56.75.

Concerns about demand due to rising coronavirus cases worldwide limited gains. A few "explanations" for today's defensive tone have been bandied about; 1) an unwind in overweight risk on positioning (profit-taking in "frothy" stocks, risk FX and commodity longs, as well as in Dollars short), 2) Covid-19 concerns (new variants reported in Japan and rumours in the US and talk of tighter lockdowns in the United Kingdom and Germany), 3) US/China concerns (after the US moved to normalise relations with Taiwan and reports emerged suggesting the US is mulling further "action" on China) and, finally, 4) rising US bond yields attracting flows from other assets classes.

Mainland China saw its biggest daily increase in virus infections in more than five months, authorities said on Monday, as new infections rose in Hebei, which surrounds the capital, Beijing.

More news: Moderna To Make 600 Million Vaccine Doses In 2021

Shijiazhuang, Hebei's capital and epicentre of the new outbreak in the province, is in lockdown with people and vehicles barred from leaving the city as authorities move to curb the spread of the disease.

"Brent is underperforming after Crown Prince Mohammed bin Salman revealed Saudi Arabia's future beyond oil and Iraq increased their pricing for crude sales to Asia in February", said Edward Moya, a senior market analyst at OANDA.

A stronger dollar, supported by hopes for more stimulus to boost the world's largest economy, also weighed on oil prices.

This comes after Saudi Arabia pledged additional voluntary output cuts of 1 million barrels per day (bpd) in February and March under a deal between the Organization of the Petroleum Exporting Countries and its allies including Russian Federation, a group known as OPEC+.

Tougher containment measures to curb the virus introduced by European countries were concerning for fuel demand, JBC Energy Research said on Monday, but added "our projections suggest that this latest Saudi production cut should be enough to keep crude fundamentals broadly solid".



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