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<\/a><\/p>\nWhile oil\u2019s run of losses meant the world\u2019s most important commodity has suffered an abrupt setback, prices remain more than 20% higher in 2021 on prospects for a recovery from the pandemic. The year-to-date climb has been underpinned by the surprise decision earlier this month by the Organization of Petroleum Exporting Countries and its allies to extend supply curbs.<\/p>\n
Oil\u2019s gains in early March may have been too rapid, setting the scene for the pullback, but bank\u2019s including Goldman Sachs Group Inc. remain bullish on the outlook.<\/p>\n
The sell-off will prove to be \u201ctransient\u201d and the pullback presents a buying opportunity amid a large rally, Goldman analysts including Damien Courvalin said in a note. There will still be a rapid rebalancing of the market, with vaccinations driving an increase in mobility, they said.<\/p>\n
Prices:<\/p>\n
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- WTI for April was 1.2% lower at $59.28 a barrel on the New York Mercantile Exchange at 2:18 p.m. in Singapore.<\/li>\n
- Most-active prices have lost 9.8% this week.<\/li>\n
- Brent for May lost 1.5% to $62.26 a barrel on the ICE Futures Europe exchange.<\/li>\n<\/ul>\n
Data from the US suggest that the latest bout of fiscal stimulus may help to spur increased travel across the world\u2019s largest economy. In addition, a dozen states are expanding access to Covid-19 vaccinations earlier than planned for every adult, accelerating the biggest such campaign in the country\u2019s history.<\/p>\n
In Europe, the European Union\u2019s drugs regulator endorsed AstraZeneca Plc\u2019s Covid-19 vaccine after concerns about its safety, enabling the bloc to put vaccinations back on track. That\u2019s urgent given the rising pace of EU-wide cases and a renewed four-week lockdown in parts of France.<\/p>\n
However, warning signs remain. WTI\u2019s prompt timespread is 10 cents in contango, a bearish pattern where near-term prices trade below those further out. And while Brent is still backwardated, a bullish structure, it\u2019s down to 22 cents a barrel from more than twice that a week ago.<\/p>\n
Given vaccination roll-outs, the case for rising consumption remains strong, although investors needed further proof, according to Victor Shum, vice president of energy consulting at IHS Markit. \u201cIf the demand spike does not materialize and production goes up, prices will fall,\u201d he warned.<\/p>\n
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