Oil prices were up on Thursday afternoon despite new and extended lockdowns that promise to slow any oil demand rebound that was expected for 2021.
This comes even as China locks down more than 22 million citizens amid a new wave of Covid-19, on top of announcements that there will be extended curfews in France that will last 12 hours of the day, beginning on Saturday.
In fact, Europe’s oil demand has failed to start the year with any sort of bang, slumping 1.76 million barrels per day so far this month, according to Rystad Energy, as road use in the UK, France, Italy, and Spain fell 37% last week compared with pre-virus levels.
Bolstering oil prices, particularly WTI, is the hope that the incoming Biden administration will quickly push through yet another round of stimulus payments in the amount of $1400 per person. This will add onto the current $600 payments that are being distributed now.
Also serving as a catalyst for rising prices are analyst rumors of a tightening of supply, despite the persistently low oil demand. Crude oil inventories in the United States were down for the second week in a row, the EIA reported on Wednesday.
Still, gasoline and distillate inventories are growing, even though production for the fuels is also down.
The market is now hoping that an influx of cash will prop up this sluggish demand.
Both benchmarks are trading at an 11-month high.