In this news, we discuss the Oil prices rise on UK vaccine approval, outcome of OPEC deal.
NEW YORK (Reuters) – Oil prices rose 2% on Wednesday as the market waited for a pact from producers on production, which many traders say will continue to be limited, and approval by the Great Brittany of a COVID-19 vaccine has boosted hopes of a recovery in demand.
Brent crude oil futures were up 94 cents, or 2%, to $ 48.36 a barrel at 1:51 EDT (1751 GMT). West Texas Intermediate crude also rose 2% to $ 45.42 a barrel.
Traders were watching the Organization of the Petroleum Exporting Countries (OPEC), Russia and other allies, known as OPEC +, which postponed discussions on oil production policy from next year to Thursday from Tuesday, according to sources.
“It appears that progress is being made, which is what the market is looking for,” said John Kilduff, partner at Again Capital LLC in New York City.
This year, the group imposed production cuts of 7.7 million barrels per day (b / d) as the coronavirus pandemic hit fuel demand.
It was widely expected to postpone these cuts to January-March 2021 amid new spikes in COVID-19 cases.
But the United Arab Emirates (UAE) said this week that even if they could sustain a turnover, they would struggle to continue with the same deep production cuts in 2021.
Britain on Wednesday became the first Western country to approve a COVID-19 vaccine, ahead of the United States and the European Union in a possible return to normal life and a resumption in demand for oil.
“The news of vaccine approval in the UK is what the oil market needed more than anything else to increase demand… much of the rest is just noise,” said John Kilduff, Partner at Again Capital LLC in New York.
US crude inventories fell 679,000 barrels in the week to Nov. 27, according to Energy Information Administration data on Wednesday, defying construction reported Tuesday by the American Petroleum Institute.
US oil production rose 100,000 barrels a day last week to its highest level since May, according to EIA data.
Additional reporting by Noah Browning and Jessica Jaganathan; Editing by David Gregorio and Elaine Hardcastle
Original © Thomson Reuters