By Gina Lee
Investing.com – Oil was down on Tuesday morning in Asia, with hopes for improving fuel demand damped as COVID-19 restrictions are tightened even as some countries approve and distribute a COVID-19 vaccine.
Brent oil futures fell 0.44% to $50.09 by 9:43 PM ET (3:43 AM GMT), remaining above the $50 mark. WTI futures were down 0.38% to $46.81.
In the U.S., New York looks set to enter a second full lockdown as the number of COVID-19 cases surge. This comes even as the U.S. starts delivering the first doses of BNT162b2, the COVID-19 vaccine co-developed by Pfizer (NYSE:PFE) and BioNTech SE (F:22UAy) on Monday. The U.S. Food and Drug Administration (FDA) granted emergency use authorization for BNT162b2 on Dec. 11. Across the Atlantic, London could see England’s toughest COVID-19 rules starting on Wednesday.
The Organization of Petroleum Exporting Countries and allies, or OPEC+, added to the gloom by cutting its projections for oil demand in the first quarter of 2021. The cartel made the decision to limit production rises to 500,000 barrels per day starting in 2021 earlier in the month and will convene for its joint ministerial monitoring committee meeting, monitoring compliance among members, on Dec. 16.
Another date on the calendar is Jan. 4, when OPEC+ will meet to discuss whether monthly increases in supply can continue. A report issued on Monday suggested that output could be incrementally restored over the next four months without triggering an oversupply in the market.
Positive vaccine news, including for BNT162b2, and the ensuing optimism saw the black liquid rise to its highest level in nine months. There were hopes that the vaccines would lead to a recovery in global energy demand, even as the number of COVID-19 cases surged in various countries worldwide.
Meanwhile, there was a tanker explosion near the Saudi Arabian port of Jeddah on Monday, which raised concerns about a possible Middle East supply disruption.
Investors now await crude oil inventory data from the American Petroleum Institute, due to be released later in the day.