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Oil prices held steady on Monday, pressured by falling stock indexes, but optimism around U.S. stimulus plans and some supply concerns buoyed futures.
Brent crude futures remained unchanged at $55.41 a barrel by 11:21 a.m. EST (1621 GMT). U.S. West Texas Intermediate crude fell 13 cents to $52.14 a barrel.
Major U.S. stock indexes fell, weighing on oil prices.
“It’s a day where the market doesn’t have a strong commitment,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “With outside markets turning negative, there’s some profit-taking on oil.”
Meanwhile, European nations have imposed tough restrictions to halt the spread of the virus, while China reported a rise in new COVID-19 cases, casting a pall over demand prospects in the world’s largest energy consumer.
Barclays raised its 2021 oil price forecasts, but said rising cases in China could contribute to near-term pullbacks.
Supporting prices, officials in U.S. President Joe Biden‘s administration on a Sunday call with Republican and Democratic lawmakers tried to head off Republican concerns that his $1.9 trillion pandemic relief proposal was too expensive.
“In the U.S., newly inaugurated President Biden seems to be pushing for a quick approval of his proposed $1.9 trillion pandemic relief package, a development interpreted by the market as a clear indication that the new U.S. administration aims to kick-start an economic recovery, which will naturally benefit fuel consumption,” said Bjornar Tonhaugen, Rystad Energy‘s head of oil markets.
Supply concerns have offered some support. Indonesia said its coast guard seized an Iranian-flagged tanker over suspected illegal fuel transfers, raising the prospect of more tensions in the oil-exporting Gulf.
Output from Kazakhstan’s giant Tengiz field was disrupted by a power outage on Jan. 17.
The Organization of the Petroleum Exporting Countries‘ oil supply in January is expected to decrease by approximately 400,000 barrels per day, tanker tracker Petro-Logistics said on Monday.
OPEC’s compliance with pledged supply curbs is close to 100%, the company said in an email to Reuters.