OIL FUTURES: Crude rises as IEA expects lower OPEC+ production in 2021

London — 1229 GMT: Crude prices rose Jan. 19 after data released by the International Energy Agency expected a 300,000 b/d drop for OPEC oil production in 2021 at 27.7 million b/d, and on favorable economic signals in the US and China.

At 12:29 pm London time (1229 GMT), the ICE March Brent contract was up 62 cents/b from the Jan. 18 settle at $55.38/b while the NYMEX February light sweet crude contract was up 50 cents/b at $52.55/b.

IEA data released Jan. 19 also showed a 240,000 b/d reduction in its outlook for oil demand across 2021 at 5.5 million b/d, emphasizing the mixed fundamentals in the crude oil market.

"Despite rising COVID-19 cases, crude oil prices are well supported by financial, economic and market fundamentals," the IEA said.

The recovery picture in the crude oil market would likely continue to stay mixed, with bullish data pointing to both rising domestic demand for refined products as well as the potential for more supply to be offered to the wider global oil market. Data from China's National Bureau of Statistics showed that 7.3% more crude oil was imported in 2020 than in 2019, signaling a robust demand recovery in the country.

"There are bearish and bullish arguments. Almost every news can be interpreted in several different ways," said Eugen Weinberg, analyst at Commerzbank.

Crude oil prices also found some support from favorable US news, as Janet Yellen, US President-elect Joe Biden's nominee to run the Treasury Department, will tell the Senate Finance Committee later Jan. 19 that the US government must "act big" with its next coronavirus relief package. Biden had outlined a $1.9 trillion stimulus package proposal in the week ended Jan. 16, stressing that a bold investment was needed to jump-start the economy and accelerate the distribution of vaccines.

Stephen Innes, chief global markets strategist at Axi, said oil remains resilient despite the mixed picture. "There are many Covid jitters out here, still Oil continues to hold and looks to nudge higher eying support from the weaker US dollar as oil sensitive currencies are showing the way."