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NEW YORK: Brent crude oil futures rose more than 1% on Friday, hovering just under $ 50 a barrel, as expectations for a U.S. economic stimulus package and the possibility of a coronavirus vaccine canceled the supply increased and deaths from COVID-19 increased.
A $ 908 billion bipartisan coronavirus relief plan gained momentum in the US Congress.
Brent closed up 54 cents or 1.11% at $ 49.25 a barrel. During the session, the contract reached its highest level since the beginning of March at $ 49.92. West Texas Intermediate rose 62 cents to $ 46.26 a barrel, after hitting a high of $ 46.68 a barrel.
Both benchmarks gained for the fifth week in a row, with Brent rising 1.7% and US crude 1.9%.
“We’re higher, despite the super bearish events, it’s all about stimulus,” said Bob Yawger, director of energy futures at Mizuho in New York. “You can’t go home short this weekend because they could sign a deal this weekend.”
OPEC +, made up of the Organization of the Petroleum Exporting Countries and its allies, agreed on Thursday a commitment to slightly increase production from January, but continue with most of the existing supply restrictions to meet demand. affected by the coronavirus.
OPEC and Russia agreed to ease deep cuts in oil production starting in January by 500,000 barrels per day with monthly increases not yet defined, without reaching a compromise on a broader policy for the remainder of 2021.
OPEC + was expected to continue existing cuts until at least March, after backing down on plans to increase production by 2 million bpd.
The increase means that the group will cut production by 7.2 million bpd, or 7% of global demand from January, compared to current cuts of 7.7 million bpd.
While some analysts saw an under-supplied oil market even with the new higher supply quotas, others expected barrels to tip the market into oversupply.
Analysts at Wood Mackenzie, for example, expect that if the increases continue through March, there could be 1.6 million bpd unwanted in the first quarter.
The Brent crude futures premium for delivery close to future months is at its highest level since February, a structure called backwardation, which generally points to a tightening of supply and suggests a reversal of current glut fears.
Meanwhile, US production has recovered from the two-and-a-half-year lows hit in May, mainly as shale producers have brought the wells back online in response to rising prices.
America’s oil rig count rose from five to 246, its highest level since May, energy services firm Baker Hughes Co. said.
Fund managers raised their net long futures and options positions on US crude oil in the week through Dec. 1, the US Commodity Futures Trading Commission (CFTC) said.
– Reuters
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