Oil edges higher, but posts 20% annual drop in tumultuous 2020

Oil pumpjacks are seen near Aneth, Utah, U.S., October 29, 2017. (Reuters)

SULAIMANI (ESTA) — Global crude prices edged higher on Friday but lost more than a fifth of their value in 2020, as lockdowns to combat the novel coronavirus depressed economic activity and sent oil markets reeling.

Still, Brent and U.S. crude benchmarks have more than doubled from April’s nadir as producers cut output to match weaker demand. News of coronavirus vaccine distributions also bolstered prices in the fourth quarter, helping futures recover to the highest in about 10 months.

Brent crude rose 17 cents to $51.80 a barrel as of 0748 GMT and U.S. West Texas Intermediate (WTI) was 2 cents up at $48.42 a barrel.

Brent fell 21.5% for the year, with WTI falling 20.5%.

Prices for 2020 bottomed in April as fuel demand collapsed due to the COVID-19 pandemic and after a price war between oil giants Saudi Arabia and Russia. WTI plummeted to a record low negative-$40.32 per barrel, while Brent fell to $15.98 barrel, the lowest since 1999.

From there prices drifted higher and took off once vaccine optimism hit the market.

“The first half was remarkable and unprecedented with a steep move lower and a snapback rally,” said John Kilduff, a partner at Again Capital Management in New York. “Then it was like watching paint dry for several months through October.”

Though prices have climbed the last two months, additional lockdowns have weighed again on fuel demand and a new, highly infectious variant of the virus has raised alarms.

The next major oil price driver will come Monday as the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, plan to debate boosting crude output from February.

(Esta Media Network/Reuters)

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