Crude oil prices moved higher on Wednesday amid expectations that OPEC+ will extend its current production cuts further into 2021, or even increase the cuts.
A smaller than expected increase in U.S. crude inventories in the week ended October 13, and rising optimism about a potential coronavirus vaccine arriving sometime soon also contributed to oil’s uptick.
West Texas Intermediate Crude oil futures for December settled at $41.82 a barrel, up $0.39 or 0.9% from previous close.
Brent crude futures were up $0.58 or about 1.3% at $44.33 a little while ago.
The expectations that OPEC and its allies will delay a planned rise in oil output offset investor concerns over weaker U.S. consumption in light of the Covid-19 resurgence.
Data released by the Energy Information Administration (EIA) this morning showed crude stockpiles in the U.S. increased by 768,000 barrels last week, less than an expected increase of 1.65 million barrels.
The data also showed that oil stored at Cushing, Oklahoma, rose 1.2 million barrels last week, against expectations for a build of 2.15 million barrels.
The American Petroleum Institute (API) reported on Tuesday a build in crude oil inventories of 4.174 million barrels for the week ending November 13 while analysts had predicted an inventory build of 1.95-million barrels.
The OPEC ministerial committee meeting on Tuesday ended with overall support for extending the production cuts by three months, but there was no formal recommendation. A decision is likely at their upcoming full ministerial meeting on Nov. 30 and Dec. 1.
On the Covid-19 vaccine front, Pfizer and BioNTech announced that the final trial results of their Covid-19 vaccine candidate indicate an efficacy rate of 95%. The companies said they plan to submit a request to the FDA for an Emergency Use Authorization for the vaccine “within days.”
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