“Oil demand is definitely under pressure currently and will be for a while until lockdowns are lifted and COVID-19 infection speed slows down” China is reporting rising COVID-19 cases, casting a pall over demand prospects in the world’s largest energy consumer. Elsewhere, Indian crude oil imports in December rose to their highest in more than two years. Dampening bullish sentiment, U.S. Democrats are still trying to convince Republican lawmakers of the need for more stimulus, raising questions over when and in what form a package will be approved. Raising the prospect of higher oil demand later in the year, the International Monetary Fund predicted global growth of 5.5% in 2021, an increase of 0.3 percentage points from the October forecast, citing expectations of a vaccine-powered uptick.

On the supply side, the Organization of the Petroleum Exporting Countries and its allies’ compliance with pledged oil output curbs is averaging 85% in January, tanker tracker Petro-Logistics said on Monday, suggesting the group has improved compliance with supply curb commitments. Also, output from the giant Tengiz field in Kazakhstan, disrupted by a power cut on Jan. 17, will be restored over the next few days, according to Tengizchevroil. “It appears that market players are cautiously sanguine about the producer group’s market management strategy and therefore about the imminent depletion in global oil inventories,” PVM analysts said.