By Bozorgmehr Sharafedin
SINGAPORE, Jan 29 (Reuters) - Oil prices edged up on Friday
but traded in a tight range as demand concerns caused by new
coronavirus variants and slow vaccine rollouts offset a cut in
Saudi Arabian oil supply and falling U.S. oil inventories.
Brent crude futures for March rose 23 cents, or
0.4%, to $55.76 a barrel by 1007 GMT.
The Brent March contract expires on Friday. The more active
April contract was up 27 cents, or 0.5%, at $55.37.
U.S. West Texas Intermediate (WTI) crude futures rose
7 cents, or 0.1%, to $52.41.
"Restrictions on the demand side because of lockdowns are
countered by a sufficient reduction in supply ... preventing
prices from falling or rising to any significant extent," said
Commerzbank analyst Carsten Fritsch.
Saudi Arabia is set to cut output by 1 million barrels per
day (bpd) in February and March. Compliance with output curbs by
the Organization of the Petroleum Exporting Countries and
allies, together known as OPEC+, has improved in January.
A 9.9 million barrel drawdown in U.S. oil inventories last
week and forecasts for a small drop in U.S. oil production in
February were also price-supportive.
However, market gains have been capped by worries about
stalled vaccine rollouts and the spread of contagious new
variants of the coronavirus.
Europe’s fight to secure COVID-19 vaccine supplies
intensified on Thursday when the European Union warned drug
companies such as AstraZeneca that it would use all
legal means or even block exports to ensure shots are delivered
as promised.
"The expected rebound in global oil demand depends a great
deal on the pace of COVID-19 vaccine distribution," said Stephen
Brennock of broker PVM.
"Any loss of momentum in vaccination programmes will
undermine the strength of the global oil demand recovery."
(Reporting by Bozorgmehr Sharafedin in London
Additional reporting by Roslan Khasawneh in Singapore and Sonali
Paul in Melbourne
Editing by David Goodman
)