Oil Market: Prices rise to $56.31 on US President  inauguration

THE prices of many crudes have risen in excess of $56.31 in the global market because of the expectation that the United States, President-elect Joe Biden, would ‘act big’ in fighting the Coronavirus pandemic.

The COVID-19 has culminated in the reduction of economic and other activities, low oil demand, and low prices in all parts of the world.

But with the inauguration of Biden, the prices of crudes, including Bonny Light and Brent, rose to $55.31 and $56.31 per barrel from $54 and $55 per barrel, recorded the previous day.

“It pointed out that rising infections, the return of stricter lockdown measures, and growing uncertainties have resulted in a more fragile economic recovery that is expected to carry over into 2021. The Meeting recognized that market sentiment has been buoyed recently by vaccine programs and improved asset markets, but underscored the need for caution due to prevailing weak demand and poor refining margins, the high stock overhang, and other underlying uncertainties.

The Meeting acknowledged the need to gradually return 2 mb/d to the market, with the pace being determined according to market conditions. It reconfirmed the decision made at the 12th ONOMM to increase production by 0.5 mb/d starting in January 2021 and adjusting the production reduction from 7.7 mb/d to 7.2 mb/d.

“The adjustments to the production level for February and March 2021 will be implemented as per the distribution detailed in the attached table. Production adjustments for April and subsequent months will be decided during the monthly ONOMM following the criteria agreed upon in the 12th ONOMM. The Meeting reiterated the need to continue closely monitoring market fundamentals, including non-DoC supply and its impact on the global oil balance and overall market stability.”