Oil prices have edged-up on hopes that the world’s major producers will ‘hold off’ on a proposed supply increase as surging cases of Covid-19 infections reduce demand for fuel.

Brent crude futures rose by $0.07 to reach $43.87 a barrel, while US West Texas Intermediate (WTI) futures were increased by $0.17 to $41.62, Reuters reported.

On 11 November, Algerian Energy Minister Mohamed Arkab stated that Organization of the Petroleum Exporting Countries, and allies including Russia, together known as OPEC+, could extend current production cuts of 7.7Mbpd until next year.

The group could also deepen the cuts if necessary, according to the minister.

Analysts said that the dimmed outlook has increased pressure on OPEC+ Group to hold off a supply increase of 2Mbpd scheduled for January.

Both the Brent and the US crude benchmarks were up this week, supported by an announcement from drug manufacturers Pfizer and BioNTech that an experimental Covid-19 treatment was almost 90% effective based on results of the initial trial.

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National Australia Bank commodity research head Lachlan Shaw was quoted by the news agency as stating: “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.

“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.”

According to ANZ Research analysts, the outlook for crude oil demand has weakened because of new coronavirus-related restrictions. This could push the market ‘back into surplus’ in the Q4-2020.

ANZ Research analysts added: “We feel OPEC has no choice but to delay output increases, most likely by three months.”