Instability in the Middle East disrupts oil supply
Before releasing the first Covid 19 vaccine in the United States, oil prices reached $47 a barrel.
News of the explosion of an oil tanker in the Middle East raised concerns about regional stability. A ship exploded near the Saudi port city of Jeddah on Sunday. This incident highlights the supply disruption in the region. Three weeks ago, another oil tanker was damaged in a possible attack on a Saudi oil terminal.
On December 9, the terrorist organization ISIS bombed two oil wells in the Iraqi city of Kirkuk.
Covid-19 vaccines create optimism about the increase of demand
New York prices have risen about 30% since late October amid successful news about the vaccine and the OPEC Plus production agreement. All 50 states are expected to receive the vaccine by Wednesday, with 2.9 million doses delivered in the first shipment. The vaccine is given to health care workers and vulnerable residents of nursing homes and the physically disabled.
Meanwhile, the prevalence of coronavirus is declining in some Asian countries, and there are signs that global demand will increase.
Oil futures in New York rose 0.6%. Brent crude also hit above $50 a barrel last week for the first time. Meantime, Iran plans to lift sanctions after Joe Biden takes office and plans almost to double its output next year.
Analysts say vaccine production will have a positive effect on fuel and jet fuel demand. They believe that a lot of optimism about the price is guaranteed.
Meanwhile, the stock market in Asia has grown and depreciated against the dollar. Americans are still seeking a new stimulus package in the United States.
West Texas Intermediate for January delivery rose 30 cents to $46.87 a barrel on the New York Mercantile Exchange at 1:09 a.m. Singapore time. Futures traded up 0.7% last week.
Brent crude for February delivery rose 0.6% to $50.29 a barrel on Monday after falling 0.6% on Friday.
Crude oil futures on the Shanghai International Energy Exchange rose 30.9 yuan on Friday after rising 6.7%.
Rising oil prices are devaluing the Indian rupee
The rise in oil prices and the widening trade deficit has increased the risk of a devaluation of the Indian currency in the coming weeks. Other factors, such as the failure of the Brexit negotiations and the change in the US Federal Reserve position, increase this uncertainty. Economists expect the rupee to strengthen as long as capital flows into stock markets are strong.
