Oil gains 1% on potential OPEC+ rethink and vaccine hopes
By Devika Krishna Kumar NEW YORK (Reuters) - Oil prices firmed by about 1% on Wednesday on hopes OPEC and its allies will delay a planned increase in oil output and after Pfizer said its COVID-19 vaccine was more effective than previously reported. The market was also supported by a smaller-than-expected increase in U.S. crude stockpiles last week
By Devika Krishna Kumar
NEW YORK (Reuters) - Oil prices firmed by about 1% on Wednesday on hopes OPEC and its allies will delay a planned increase in oil output and after Pfizer said its COVID-19 vaccine was more effective than previously reported.
The market was also supported by a smaller-than-expected increase in U.S. crude stockpiles last week.
Both contracts jumped by about $1 after Pfizer Inc
"Oil prices today are modestly rising on hopes that OPEC+ will decide to postpone its planned production increase in January and on the latest vaccine euphoria," said Rystad Energy's head of oil markets, Bjornar Tonhaugen.
To tackle weaker energy demand amid a second wave of the pandemic, Saudi Arabia called on fellow members of the OPEC+ group to be flexible to meet market needs and to be ready to adjust their agreement on output cuts.
OPEC+, comprising the Organization of the Petroleum Exporting Countries, Russia and other producers, met on Tuesday but made no formal recommendation. The group is due to discuss policy at a full ministerial meeting to be held on Nov. 30 and Dec. 1.
Members of OPEC+ are leaning towards delaying the current plan to boost output in January by 2 million barrels per day (bpd), sources have said. They are considering a possible delay of three or six months.
In the United States, crude inventories
The build was due in part to a 400,000-barrel hike in production to 10.9 million bpd last week.
"Between the U.S. and Libya, nearly 2 million bpd of crude oil have been added to the global supply chain in recent weeks," said Bob Yawger, director of energy market futures at Mizuho.
"Last time U.S. production was on the rise, OPEC ultimately decided to open the spigots, and the resulting price war sent WTI to negative pricing for the first time ever. I doubt that will happen again. But I am sure the Russia and the Saudis are not happy."
(Additional reporting by Ahmad Ghaddar in London, Yuka Obayashi in Tokyo; Editing by David Goodman and Marguerita Choy)
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