Receive our newsletter – data, insights and analysis delivered to you
  1. News
December 2, 2020

Oil prices edge lower but recover after UK’s vaccine approval

Oil prices have slipped but pared some losses on news that the UK has become the first country to approve a vaccine for Covid-19.

By Himaja Ganta

Oil prices have slipped but pared some losses on news that the UK has become the first country to approve a vaccine for Covid-19.

The vaccine is expected to be rolled out from early next week.

Brent crude futures slipped $0.08 to $47.34 a barrel while the US West Texas Intermediate (WTI) crude futures fell $0.14 to reach $44.41 a barrel, Reuters reported.

Prices were hit earlier due to an unexpected build in oil inventories in the US and postponed talks on next year’s oil output policy by the Organization of the Petroleum Exporting Countries (OPEC), and allies, including Russia, together known as OPEC+, to 3 December.

Data released by industry group American Petroleum Institute (API) showed a rise in US crude stocks by 4.1 million barrels last week ending 27 November.

Earlier this year, the OPEC+ Group imposed production cuts of 7.7Mbpd to support prices as the Covid-19 pandemic affected fuel demand.

Content from our partners
Green investment: What gives Scotland multiple advantages
How the North of Tyne region is leveraging its legacy to define its future
Q&A with Chevron Lubricants’ Paul Sly, global industrial OEM specialist, and Nathan Knotts, global brand technical manager

It is highly expected that the group will extend these reductions into January-March next year due to a surge in Covid-19 infections.

DailyFX strategist Margaret Yang stated: “Oil traders have long been anticipating a three-to-six months delay in planned production hikes by the coalition, rendering oil prices vulnerable to unwinding trades should OPEC+ fail to deliver a plan to rein output.”

If the OPEC+ denies extending cuts, ANZ analysts estimated that the oil market surplus could run to records highs of 1.5Mbpd to 3Mbp in the first half of 2021.

However, the UAE said this week that it would be willing to support supply cuts only if compliance of the group members with respect to cut commitments improved.

Related Companies

Topics in this article:
NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Friday. The industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU