Goldman Sachs – Asia shares slip again, silver gets boost
Oil Steady Near $52 With Virus Comeback Clouding Demand Outlook
(Bloomberg) — Oil steadied in Asian trading — after the first back-to-back weekly decline since October — amid fresh evidence that a resurgence of the coronavirus is taking a toll on economic growth and energy demand.Futures in New York traded near $52 a barrel after a Chinese purchasing managers’ index for manufacturing missed estimates for January, showing that efforts to rein in Covid-19 are starting to affect Asia’s largest economy. A top health adviser to President Joe Biden warned Sunday that a new variant of the virus circulating in the UK. will likely become the dominant strain in the U.S. and may lead to future restrictions on in-person gatherings.See also: Asian Fuel Recovery Faces Hurdle as Virus to Boost China ExportsA disciplined response from producers has kept losses in check, however. OPEC and its allies estimated they implemented 99% of their agreed oil-supply curbs in January, according to a delegate who asked not to be named. Chevron Corp., meanwhile, said it will wait until it has a firmer read on the trajectory of the pandemic and OPEC+ before resuming its plan to increase shale output.The deteriorating demand outlook, offset by tight supply and a surge of investment in commodities, has seen crude trade in a relatively narrow range around $52 a barrel over the past couple of weeks. But while headline prices have lacked direction, the futures curve is pointing to a more balanced market with West Texas Intermediate and Brent moving further into backwardation, a bullish structure that signals tightness of supply.Brent’s prompt timespread is 21 cents a barrel in backwardation, compared with a contango of 7 cents at the beginning of January. The spread for WTI is 11 cents in backwardation, from a 14 cent contango at the start of the year.Implementation of the OPEC+ cuts last month was at 103% among members of the Organization of Petroleum Exporting Countries, and 93% for their non-OPEC partners, including Russia and Kazakhstan, according to the delegate.See also: Saudi Arabia’s Oil Fears Look Well Founded: Julian LeeThe group’s Joint Technical Committee will present its assessment to the Joint Ministerial Monitoring Committee, which meets on Wednesday to discuss the alliance’s strategy. The JMMC is unlikely to recommend any policy changes, according to delegates who declined to be identified.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.