Fundamental analysis
15 January, 2021
Research Department
Oil prices fell on Friday as concerns about Chinese cities in lockdown due to coronavirus outbreaks tempered a rally driven by strong import data from the world’s biggest crude importer and U.S. plans for a large stimulus package. While producers are facing unparalleled challenges balancing supply and demand equations with calculus involving vaccine rollouts versus lockdowns, financial contracts have been boosted by strong equities and a weaker dollar, which makes oil cheaper, along with strong Chinese demand. A nearly $2 trillion COVID-19 relief package in the U.S. unveiled by President-elect Joe Biden may increase oil demand from the world’s biggest crude consumer, but worse than expected jobs data cast a shadow over the plans.
