Oil prices sapped by rising coronavirus cases; anticipated drop in US inventory stems losses

Oil prices slipped on Tuesday as investors remained concerned about climbing coronavirus cases globally, though an anticipated drawdown in crude oil inventory in the United States for a fifth straight week stemmed losses.

After falling on Monday, Brent crude oil futures slipped by 9 cents, or 0.2%, to $55.57 a barrel by 0135 GMT while US West Texas Intermediate (WTI) fell by 8 cents, or 0.2%, to $52.17 a barrel.

Worldwide coronavirus cases surpassed 90 million on Monday, according to Reuters tally, as nations around the globe scramble to procure vaccines and continue to extend or reinstate lockdowns to fight new coronavirus variants.

"I think the market will be rapid to conclude that yesterday's modest pullback in price, provided the virus spread in China remains contained, was but a blip on the radar screen," said Stephen Innes, chief global market strategist at Axi in a note, citing the prospect of increased economic stimulus in the United States.

President-elect Joe Biden, who takes office on Jan. 20 with his Democratic party in control of both Houses, has promised "trillions" in extra pandemic-relief spending.

US crude oil stockpiles likely fell for a fifth straight week, while refined products inventories were seen up last week, a preliminary Reuters poll showed on Monday.

The poll was conducted ahead of reports from industry group American Petroleum Institute on Tuesday and the Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, on Wednesday.

Brent could rise to $65 per barrel by summer 2021, Goldman Sachs said, driven by Saudi cuts and the implications of a shift in power to the Democrats in the United States. The Wall Street investment bank had previously predicted oil would hit $65 by year-end.