Oil prices spiked on Wednesday as it was expected that the producer group OPEC and its partners would delay the planned increase in oil production to compensate for a larger build-up of US raw materials.
Brent crude futures rose 53 cents, or 1.2%, to $ 44.28 a barrel from 1046 GMT, while US West Texas Intermediate crude rose 44 cents, or 1.1%, to $ 41.87.
“Oil prices are rising today with the slightest expectation that OPEC + will decide to postpone its projected production growth in January and the latest vaccine will be on Euphoria,” said Rustad Energy’s head of oil markets, Björnar Tongunan.
American companies Pfizer and Moderna have reported a Kovid-19 epidemic, with reports of high success rates for their coronavirus vaccines.
As the epidemic continues its second wave to deal with weak energy demand, Saudi Arabia has called fellow members of the OPEC + group – including the Organization of Petroleum Exporting Countries (OPEC) and other producers – including Russia – in the oil market. In response to this one needs to be flexible.
OPEC + held a meeting on Tuesday, with no formal recommendations made ahead of the group’s full ministerial meeting on 30 November and 1 December to discuss the policy.
OPEC + members are bowing to a delay of 2 million barrels per day (bpd) or 2% of global demand in a previously agreed plan to ramp up production in the new year, sources told Reuters this week. They are considering options to delay the increase by three or six months.
Expecting the creation of 1.7 million barrels in a Reuters poll by analysts, the US Petroleum Institute (API) said last week that both benchmarks were down in the first session after US crude oil reserves rose 4.2 million barrels.
Tamas Varga of Oil Brokerage PVM stated, “Distal crude data was counted by 5 million barrels of drawl in distillate stocks.
Official Energy Information Administration data is scheduled to be released later on Wednesday.
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