Thursday, November 12, 2020

Please OPEC! Do Not Disappoint This Commodity

 Oil prices continued to trade strong on Thursday, following rising hopes that OPEC would delay plans to ease production cuts due to increased Covid-19 cases stifling fuel demand.

The benchmark Brent crude futures traded up $ 43.88 a barrel, while the US WTI was positive at $ 41.55 a barrel.

Both crude oil benchmarks have recorded an increase of over 12% this week lifted by expectations by a vaccine report developed by Pfizer stating its effectiveness in preventing coronavirus.

Algerian Energy Minister said OPEC and its allies, also known as OPEC +, are likely to extend the production cut-off agreement by 7.7 million barrels by 2021, or add another reduction if necessary.

In addition, the significant reduction in US crude oil supply also led to higher commodity prices. The market is now awaiting a report from the Energy Information Administration (EIA) to get the latest developments on crude oil inventory.

However, the continuing increase in Covid-19 cases in Europe and the United States still puts pressure on oil prices as concerns over fuel demand may be affected following new sanctions imposed to curb the spread of the virus.