Oil prices on Wednesday posted limited falls over investor concerns as to whether the existing vaccines will be enough for an economic and oil demand rebound, overshadowing an estimated decline in US crude oil stocks.
International benchmark Brent crude was trading at $61.01 per barrel at 0647 GMT for a 0.34% decrease after closing Tuesday at $61.22 a barrel.
American benchmark West Texas Intermediate (WTI) was at $58.25 a barrel at the same time for a 0.19% fall after ending the previous session at $58.36 per barrel.
The limited fall in prices was driven by the slow pace of vaccine campaigns, concerns over the availability of vaccines for all countries, and the effectiveness of the existing vaccines amid different variants of the virus.
Oil prices had been on the rise for eight consecutive days and reached 13-month high levels on Tuesday, as more than 1 million barrels of production cuts per day by Saudi-led OPEC and non-OPEC countries was exactly what the markets needed amid a pandemic-driven supply glut and low demand.
With Saudi Arabia's voluntary reduction, the production cut of OPEC+ will reach 8.125 million barrels per day (bpd) for February and 8.05 million bpd in March, thus reducing output in February by 925,000 bpd and 850,000 bpd in March relative to output rates in January.
Late Tuesday, the American Petroleum Institute (API) announced its estimate of a fall of 3.5 million barrels in US crude oil inventories relative to the market expectation of a 1.34 million-barrel rise.
If crude stocks fall in line with the API’s expectations, it signals a rebound in crude demand in the US, the world's largest oil consumer, to positively support prices.
The US dollar index, which measures the value of the American dollar against a basket of currencies, including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, fell 0.03% to 90.43.
The decline in the value of the greenback is encouraging oil-importing countries to purchase more crude oil at cheaper dollar prices, which in turn is supporting higher crude prices.
By Sibel Morrow