Oil drops as supply concerns, vaccine doubts sap rally

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In this news, we discuss the Oil drops as supply concerns, vaccine doubts sap rally.

TOKYO (Reuters) – Oil prices were lower on Friday in calm trading due to the Thanksgiving holiday in the United States, dropping amid concerns over oversupply and doubts about a vaccine to end the coronavirus pandemic.

Brent was down 31 cents, or 0.7%, to $ 47.49 at 0758 GMT, after falling 1.7% overnight. West Texas Intermediate was down $ 1.02, or 2.2%, to $ 44.69. U.S. crude prices did not stabilize on Thursday due to the holidays.

Both benchmarks rose by around 6% this week after AstraZeneca said its COVID-19 vaccine could be effective up to 90%, adding to the results of successful trials of two more ongoing development in the fight to end the pandemic.

But questions have been raised about the “vaccine for the world”, with several scientists doubting the robustness of the trial results.

“With much of the oil rally in November based on expectations, sentiment and speculative quick money, some sort of correction was long overdue,” said Jeffrey Halley, senior market analyst at OANDA.

“A tight market and the OPEC + ministers meeting on Monday seem to have been the forerunners for traders to ease their bullish stance,” he said.

The Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, which make up the OPEC + grouping, tend to delay the expected increase in oil production next year, three sources said. close to OPEC +.

OPEC + planned to increase production by 2 million barrels per day (b / d) in January – about 2% of global consumption – as it works to reduce record reductions in supply this year. OPEC + ministers are due to meet from Monday.

The increase in Libyan production is contributing to concerns about oversupply in the market as many people ignore foreclosure advice and travel.

Nearly 6 million Americans took plane trips from Friday to Wednesday before the Thanksgiving break because they ignored advice from the Centers for Disease Control to stay home, the US Transportation Security Administration said.

Reporting by Aaron Sheldrick; Edited by Stephen Coates and Alexander Smith

Original © Thomson Reuters

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