Oil prices surrendered earlier gains in the final hours of trading on Thursday, January 21. Brent dipped 0.28% to $55.58/bbl, while WTI posted a smaller loss, down 0.15% to $52.89/bbl.
Western media reports that Iran, which is not a party to the OPEC+ agreement, has started to ramp up oil production, while Venezuela, bypassing US sanctions, is exporting oil to China, exerted a negative impact on market sentiment. Thursday’s API report showed an unexpected weekly build in US crude inventories by 2.56 mln bbl, giving impetus to the correction.
This morning, oil continues to trend lower on fears of a supply overhang, as well as fears of new lockdowns in Europe due to an upsurge in Covid-19 cases, with Brent down 0.93%, and WTI off 1.07%. Our forecast today for the Brent price is $55-56/bbl.