Oil steady as pandemic lockdown worries offset vaccine hopes
Oil prices were little changed on Tuesday as worries that lockdowns to fight a new surge in coronavirus cases could hit short-term demand offset hopes for a vaccine and the possibility of tighter OPEC+ supply policies.
Brent futures LCOc1 fell 7 cents, or 0.2%, to settle at $43.75 a barrel, while U.S. crude CLc1 gained 9 cents, or 0.2%, to settle at $41.43.
The oil market pared earlier losses in the last 15 minutes of trade after U.S. Federal Reserve Chair Jerome Powell said the Fed was committed to “using all of our tools to support the recovery for as long as it takes until the job is well and truly done.”
Those price moves came ahead of U.S. data from the American Petroleum Institute, an industry group, later Tuesday that is expected to show crude inventories USOILC=ECI rose 1.7 million barrels last week after gaining 4.3 million barrels in the prior week, according to a Reuters poll.
But the short-term economic outlook remains hazy with several European nations tightening restrictions as coronavirus cases increase.
To tackle weaker energy demand amid a wave of new coronavirus cases, Saudi Arabia called on fellow OPEC+ members to be flexible in responding to oil market needs as it builds the case for a tighter production policy in 2021.
OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC), Russia and others, lowered its outlook on oil demand growth for 2021, according to a confidential document seen by Reuters.
An option gaining support among OPEC+ nations is to keep the existing cuts of 7.7 million barrels per day (bpd) for a further three to six months, sources said, rather than tapering the reduction to 5.7 million bpd in January.
“It’s widely expected OPEC+ will push back on plans to increase production ... in January but with the Pfizer and Moderna announcements pushing oil back above $40, there may not be the same support there as there was just over two weeks ago,” said Craig Erlam, senior analyst at OANDA.
OPEC+ held a ministerial committee meeting on Tuesday that made no formal recommendation. The group will hold a full meeting on Nov. 30-Dec. 1.
GRAPHIC: OPEC+ Scenarios and Impact on Oil Inventories - Reuters Graphic
Reference: Reuters
Thai
Eng