Oil prices dipped on Friday, but hovered near 2023 highs as optimism over China’s energy demand and further U.S. stimulus outweighed rising coronavirus cases and worries over a slow vaccine rollout.
Oil prices have been on a tear since the start of the year, with Brent crude, the international benchmark, rising almost 7 percent and U.S. crude gaining more than 5 percent.
The gains have been driven by signs that demand in China, the world’s second-largest oil importer, is recovering faster than expected. This has been underpinned by further stimulus from the U.S., which has helped boost global economic activity.
At the same time, the rollout of coronavirus vaccines have increased hopes that the pandemic will eventually be contained and that demand for oil will pick up further.
However, there are still concerns over the pace of the vaccine rollout, with many countries still struggling to get their programs off the ground.
In addition, rising coronavirus cases have raised fears of further restrictions on movement and travel, which could hit demand for oil.
Looking ahead, investors will be closely monitoring the oil market for signs of further demand recovery and any developments with the vaccine rollout.
Overall, it looks like oil prices are set to remain supported in the near-term, as optimism over China’s energy demand and further U.S. stimulus outweighs rising coronavirus cases and worries over a slow vaccine rollout.
Investors should keep a close eye on the oil market in the coming weeks, as any further signs of recovery in demand or progress with the vaccine rollout could help oil prices go even higher.
In the meantime, oil prices are likely to remain volatile, as the market continues to grapple with the uncertainty surrounding the coronavirus pandemic.