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By Jessica Resnick-Ault
NEW YORK, Jan 29 (Reuters) - Oil prices edged up slightly on
Friday but traded in a tight range, and briefly dipped on demand
worries due to coronavirus variants and slow vaccine rollouts,
which offset a bullish sentiment due to a cut in Saudi Arabian
oil supply and falling U.S. oil inventories.
"The vaccine numbers are just not there," said Bob Yawger,
director of energy futures at Mizuho in New York. Additionally,
he said a U.S. economic stimulus package may not come quickly
enough to support the market.
Earlier, U.S. President Joe Biden urged congress to take
swift action on a $1.9 trillion COVID-19 relief proposal.
"There is no time for any delays," Biden said. "It could
take a year longer to return to full employment if we don't act
and don't act now."
Global benchmark Brent crude futures for March rose
44 cents, or 0.8%, to $55.97 a barrel by 12:13 EST (16:13 GMT).
The Brent March contract expires on Friday. The more active
April contract was up 25 cents, or 0.4%, at $55.35.
U.S. West Texas Intermediate (WTI) crude futures rose
7 cents, or 0.1%, to $52.36.
Both front month Brent and WTI were on track to post a
weekly gain of less than 1%.
A Reuters poll showed oil prices are expected to hover
around current levels for much of 2021 before a recovery gains
traction towards year end.
"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+, improved in January.
OPEC oil output rose in January, a Reuters survey found,
after OPEC+ agreed to an easing of supply curbs.
However, the rise was less than the amount agreed under the
deal, with an involuntary drop in Nigerian exports limiting the
increase.
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 provided price support.
But Stephen Brennock of broker PVM said the market remains
focused on the vaccine rollout:
"Any loss of momentum in vaccination programmes will
undermine the strength of the global oil demand recovery."
(Reporting by Jessica Resnick-Ault in New York
Additional reporting by Bozorgmehr Sharafedin in London, Roslan
Khasawneh in Singapore and Sonali Paul in Melbourne
Editing by David Goodman, Louise Heavens and David Gregorio)
