Global oil prices pulled back slightly on Tuesday after rising on strong optimism on the back of COVID-19 vaccine and the expectations that OPEC and allies would agree to extend production cuts by another three months.
“Oil prices enjoy modest gains this morning, as enthusiasm over a new, seemingly more efficient, vaccine has led a new price rally,” said Rystad Energy’s head of oil markets, Bjornar Tonhaugen “Now all eyes are on possible leaks from today’s OPEC+ technical meeting,” he added.
The Brent crude oil, against which Nigerian oil price is measured, declined by 38 cents or 0.87 percent to $43.44 per barrel, while West Texas Intermediate was down by 32 cents or 0.77 percent to $41.02 per barrel.
Still, experts believe the gradual increase in oil demand due to economies opening up for business despite COVID-19 could help boost the oil market and support prices.
“Oil demand in China is exceeding pre-COVID-19 levels which suggests oil demand is not permanently impaired,” analysts from Bernstein Energy said, saying this supported data indicating “oil demand has not been structurally damaged” by the pandemic.