Oil Prices Extend Rise on COVID Vaccine Optimism

<p>

Storage will also be a central concern. Johannes Eisele / Agence France-Presse / Getty Images

Oil futures continued to climb on Wednesday, erasing industry data showing an increase in U.S. crude inventories as investors remained focused on progress towards COVID-19 vaccines, which could lead to a recovery of economies around the world.

West Texas Intermediate crude for January CL.1 delivery, + 0.75%, rose 40 cents, or 0.9%, to $ 45.31 a barrel on the New York Mercantile Exchange. January Brent BRN00, + 0.79%, the global benchmark, rose 39 cents, or 0.8%, to $ 48.25 a barrel on ICE Futures Europe. The two benchmarks on Tuesday recorded their highest settlements since early March.

Oil rebounded in November, finding support as drugmakers reported strong performance of vaccine candidates in late-stage trials, eclipsing concerns of a continued increase in COVID-19 cases in Europe and the United States. United.

Crude was also boosted on Tuesday after the Trump administration lifted an obstacle to a transition to a Biden administration.

Still, “it’s hard not to worry about how quickly the price of oil has been pegged in the recent good news, and hedge funds have flipped bullish from under $ 45 to over $ 48. $, including expectations that OPEC will extend current production cuts from 3 to 6 months, ”Stephen Innes, chief global markets strategist at Axi, said in a note.

“The basic market scenario remains that an extension will be announced. Yet oil will be sensitive in the short term to any outcome seen as indicating that the OPEC tensions mentioned in recent news articles are real and could threaten the implementation of cuts during what remains an uncertain period for oil. “, did he declare.

Reports earlier this month said tensions were mounting within the alliance between the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC +.

The alliance is expected to ease existing brakes in January, but is expected to make a decision from November 30 to December 30. 1 meeting to delay this move.

Meanwhile, data on US supplies could be finalized later Wednesday.

The American Petroleum Institute reported on Tuesday evening that supplies of U.S. crude rose 3.8 million barrels last week, sources said. The data also showed that gasoline inventories increased by 1.3 million barrels, while distillate inventories fell by 1.8 million barrels. Crude inventories at the Cushing, Oklahoma storage facility were down 1.4 million barrels for the week, according to sources.

More closely monitored data from the Energy Information Administration is expected Wednesday morning. Analysts polled by S&P Global Platts predict a drop in crude inventories of 1.3 million barrels, while gasoline inventories are expected to increase by 800,000 barrels and distillates will decrease by 2.1 million barrels.

EIA will also release weekly data on natural gas inventories on Wednesday, a day earlier due to the Thanksgiving holiday on Thursday.

December RBZ20 gasoline, + 0.77%, rose 0.8% to $ 1.2676 per gallon, while December HOZ20 fuel oil, + 1.01%, rose 1.2% to $ 1.3703 per gallon.

December NGZ20 natural gas, -0.82%, fell 1.3% to $ 2.739 per million British thermal units.