Oil keeps climbing on hopes OPEC+ will hold back supply as COVID-19 cases rise
Reuters
Published Nov 11, 2020 08:48PM ET
By Sonali Paul
MELBOURNE (Reuters) - Oil prices rose in early trade on Thursday, taking the week's gains to more than 12% on growing hopes that the world's major producers will hold off on a planned supply increase as soaring cases of COVID-19 dent fuel demand.
Algeria's energy minister said on Wednesday that OPEC+ - grouping the Organization of the Petroleum Exporting Countries (OPEC) and other suppliers including Russia - could extend current production cuts of 7.7 million barrels per day (bpd) into 2021, or deepen them further if needed.
The weakening outlook has piled pressure on OPEC+ to delay a supply increase of 2 million bpd scheduled for January, which the market is now pricing in, analysts said.
U.S. West Texas Intermediate (WTI) crude (CLc1) futures climbed 35 cents, or 0.8%, to $41.80 a barrel at 0130 GMT, while Brent crude (LCOc1) futures rose 31 cents, or 0.7%, to $44.11 a barrel.
Both Brent and WTI have soared this week, lifted by hopes that the global coronarivus pandemic can be brought under control after initial trial data showed an experimental COVID-19 vaccine being developed by Pfizer Inc (N:PFE) and Germany's BioNTech (DE:22UAy) was 90% effective.
"It's great news, no question about that ... But it will take time for vaccines to be rolled out, and therefore it will take time for demand to be positively impacted by that," said Lachlan Shaw, National Australia Bank (OTC:NABZY)'s head of commodity research.
In the meantime, fuel demand is under pressure from rising infections in Europe, the United States and Latin America. As a result, OPEC has said demand will rebound more slowly in 2021 than previously thought.
"In many ways the market is looking forward into 2021, to a time when we do have vaccines rolling out, and to a time where OPEC and allies have held back some of those scheduled supply increases," National Australia Bank's Shaw said.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.