The OPEC+ ministers are scheduled to meet on November 30, and rumors state that they are leaning towards delaying 2021’s planned increase in oil output. Today, oil prices were mixed, but they remain on course for a fourth straight week of gains ahead of the meeting.
Brent crude for January gained 35 cents or 0.7%, to trade at $48.15 a barrel by 1.21 pm GMT, while the more active February contract surged by 42c to reach $48.21. In the meantime, West Texas Intermediate (WTI), was down 28c, or 0.6%, to trade at $45.43.
Both of these benchmarks are up by almost 7% over this week. These gains happened after positive news on a possible coronavirus vaccine from AstraZeneca and others dominated the headlines. Nevertheless, doubts have come up over AstraZeneca’s “vaccine for the world”, with many scientists sounding cautious over the trial results.
JPMorgan said:
“While a successful vaccine rollout should break the link between infection and mobility, even then global oil demand will likely only reach its pre-pandemic run rate by mid-2022.”
OPEC+ seems to be leaning towards delaying the scheduled increase in oil output, according to reliable sources close to the group. Previously, OPEC+ planned to raise output by two million barrels per day in January, which represents 2% of global consumption. That decision was made after major supply cuts in 2021.
OPEC+ ministers will meet on November 30 and December 1. JPMorgan added:
“We reiterate our view that the alliance will likely choose to delay the 2-million bpd tapering decision on November 30 by a quarter, from January 1 to April 1.”
Informal talks between the ministers will happen on November 28. In that context, rising Libyan output is contributing to worries about oversupply in the global market. The OPEC member, exempt from the oil cuts, has added over 1.1-million bpd of output since early September.
