Oil price climb continues on Asian market strength

Cornelia Mascio
Ноября 25, 2020

"With an orderly Presidential transition in sight, vaccine boosters and expectations that OPEC+ will extend production cuts next week, oil markets completely ignored the unexpected 3.8 million-barrel climb in API U.S. crude inventories", said Jeffrey Halley, senior market analyst at OANDA.

Brent crude rose 31 cents, or 0.7%, to $46.37 a barrel by 0914 GMT and hit a session high of $46.72, its highest since March 6.

These developments show traders are reassessing prospects of a rebound in demand in the wake of coronavirus vaccine optimism and easing of political uncertainty in Washington.

Oil's value has risen by more than a quarter this month amid positive vaccine results.

West Texas Intermediate crude gained $2.09, or 4.8%, to $44.93. Both benchmarks jumped 5% last week.

Oil traders are further riding the bandwagon fast on the latest geopolitical reports showing that the world's most important economy will have a smooth transition of power amid reports stating U.S President Joe Biden, as selected Wall Street favorite Janet Yellen to lead the U.S Treasury, thereby kept the oil bears on the bench arbitrarily sulking.

"Progress on developing and distributing a vaccine de-risks the path back to normal for oil markets", said Stephen Innes, chief global markets strategist at financial services firm Axi.

Expectations that USA crude inventories edged lower last week also added support.

Iran's Supreme Leader Ayatollah Ali Khamenei said past negotiations with the USA over sanctions had been a failure because they didn't ensure lasting relief, in his first public comments on talks as Joe Biden's incoming administration is expected to reengage with Tehran.

OPEC+, which meets on November 30 and December 1, is looking at options to delay by at least three months from January the tapering of their 7.7 million barrel per day (bpd) cuts by around 2 million bpd.

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