SULAIMANI (ESTA) — Oil prices rose on Thursday, taking the week’s gains to more than 11% on growing hopes that the world’s major producers will hold off on a planned supply increase as soaring cases of COVID-19 dent fuel demand.
Brent crude LCOc1 futures rose 10 cents, or 0.23%, to $43.90 a barrel at 0541 GMT, while U.S. West Texas Intermediate (WTI) crude CLc1 futures climbed 11 cents, or 0.27%, to $41.56 a barrel.
Reuters cited Algeria’s energy minister as saying on Wednesday that OPEC+ — grouping the OPEC and other suppliers including Russia – could extend current production cuts of 7.7 million barrels per day (bpd) into 2021, or deepen them further if needed.
The weakening outlook has piled pressure on OPEC+ to hold back a supply increase of 2 million bpd schedule for January, with the market now pricing in a delay, according to analysts.
“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,” Lachlan Shaw, National Australia Bank’s head of commodity research, told Reuters.
In the meantime, fuel demand is under pressure from rising infections in Europe, the United States and Latin America. As a result, OPEC has said demand will rebound more slowly in 2021 than previously thought.
