Tight, But Biased Lower In Asia

WTI & Brent sit ~$0.30 below their respective settlement levels, building on yesterday's losses, which were primarily driven by worry re: the COVID-19 mutation in the UK and the potential knock-on impact re: fuel demand. Still, the benchmarks operate well within the confines of their Monday ranges, owing to the recovery from worst levels that became apparent as we moved through the day (which had no overt headline trigger, but likely centred on hope re: U.S. fiscal matters and the efficacy of existing vaccines re: treating the new COVID strain).

• In terms of crude market specifics, Monday saw focus fall on comments from Russian Energy Minister Novak, who suggested that oil production should be restored to meet rising demand, but any rise in output should not result in oversupply issues. This was followed up by a BBG source report which suggested that "Moscow believes it makes sense to raise output from the Organization of Petroleum Exporting Countries and its allies by 500,000 barrels a day in February, matching the hike already agreed for January." Such a move would represent the maximum increase allowed at the meeting. The comments/source reports were followed up by rhetoric from the Iranian Oil Minister, who noted that the views of both parties (Russia & Iran) are close re: OPEC+ matters.
• The latest round of weekly API crude inventory estimates will hit late on Tuesday.