Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Crude Oil Prices Leap Again, Shrugging off OPEC Gloom

CommoditiesNov 11, 2020 14:30
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Geoffrey Smith 

Investing.com -- Crude oil prices hit a two-month high on Wednesday before retreating as the Organization of Petroleum Exporting Countries cut its forecasts for global demand for a fifth straight month.

By 9 AM ET (1400 GMT), U.S. crude futures were up 3.0% at $42.59 a barrel, having earlier hit a high of $43.05 – the first time it’s been that high since early September. The international benchmark Brent futures contract was up 2.9% at $44.84 a barrel.

U.S. Gasoline RBOB Futures were up 2.3% at $1.2212 a gallon, only fractionally off a five-week high that they hit earlier.

Futures retreated, albeit only modestly, after OPEC trimmed its forecasts for global oil demand by around 300,000 barrels a day both for 2020 and 2021, owing to the fresh wave of Covid-19 that is hitting northern hemisphere economies as they head into winter.

The reduction for this year is especially brutal, given that only two months of the year remain. It translates into a reduction of 960,000 barrels a day in OPEC’s estimate of what it needs to publish to balance supply and demand. 

The forecasts form a more compelling statistical argument for putting off the production increase that OPEC and its allies, chiefly Russia, have scheduled for the start of next year. The OPEC+ bloc is due to take a decision on that in a meeting at the end of the month, and the bloc’s two key players, Saudi Arabia, have both signaled their openness to “tweaking” that agreement if market conditions require it.

Market sentiment continues to be underpinned by Monday’s news from Pfizer (NYSE:PFE) that its Covid-19 drug was 90% effective. Hopes for widespread distribution of an effective vaccine are now reviving demand expectations for 2021. However, the mood is also being supported by signs of short-term demand holding up better than expected, despite the rampant spread of Covid-19 across the U.S.

American Petroleum Institute data released on Tuesday showed a 5.15 million barrel drop in crude stocks last week, a week when many had expected volatility caused by the latest hurricanes to pass out of the calculations. The U.S. government’s inventory data will be published on Thursday this week, a day later than usual, owing to the Veterans’ Day holiday today.

Also on Thursday, the International Energy Agency will present its monthly report on the world oil market, which will be scanned closely for corroboration of OPEC's view.

Crude Oil Prices Leap Again, Shrugging off OPEC Gloom
 

Related Articles

Oil prices rise, hit 2-month highs on supply worries
Oil prices rise, hit 2-month highs on supply worries By Reuters - Sep 23, 2021 2

By Jessica Resnick-Ault NEW YORK (Reuters) -Oil prices rose on Thursday, supported by growing fuel demand and a draw in U.S. crude inventories as production remained hampered in...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email