Oil prices mixed but still set for weekly gain ahead of Opec+ meeting

London — Oil prices were mixed on Friday but remained on course for a fourth straight week of gains ahead of a meeting of  oil cartel Opec and allies, including Russia (Opec+), early next week.

Brent crude for January rose 35c, or 0.7%, to $48.15 a barrel by 1.21pm GMT and the more active February contract gained 42c to $48.21. West Texas Intermediate (WTI), meanwhile, was down 28c, or 0.6%, at $45.43.

Both benchmarks are up about 7% over the week after encouraging news on potential Covid-19 vaccines from AstraZeneca and others. However, questions have been raised over AstraZeneca’s “vaccine for the world”, with several scientists sounding caution over the trial results.

“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,” JPMorgan said.

Opec+ is leaning towards delaying next year’s planned increase in oil output, said three sources close to the group.

Opec+ was planning to raise output by 2-million barrels per day (bpd) in January — about 2% of global consumption — after record supply cuts this year. Opec+ ministers are due to meet from Monday, November 30, for two days.

“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,” JPMorgan said.

Informal talks between ministers are set to take place on Saturday.

Rising Libyan output is also contributing to concerns about oversupply in the market. The Opec member, which is exempt from the oil cuts, has added more than 1.1-million bpd of output since early September.

Reuters