Oil prices rose on Thursday as producers including Saudi Arabia and Russia locked horns over the need to extend record production cuts set in place in the first wave of the COVID-19 pandemic.
Brent crude was up 21 cents, or 0.4 percent, at $48.46 a barrel by 08:02 GMT, after gaining 1.8 percent on Wednesday. US West Texas Intermediate oil was 11 cents, or 0.2 percent, higher at $45.39 a barrel, having ended 1.6 percent higher in the previous session.
The Organization of the Petroleum Exporting Countries (OPEC) and Russia are resuming discussions on Thursday to agree on how much crude to pump in 2021 after earlier talks produced no compromise on how to tackle weak oil demand amid a new coronavirus wave.
OPEC and its allies, in the group known as OPEC+, had been widely expected to roll over oil cuts of 7.7 million barrels per day, or 8 percent of global supplies, at least until March 2021.
But after hopes for speedy approval of anti-virus vaccines spurred a rally in oil prices at the end of November, some producers questioned the need to tighten oil output, a policy which is supported by OPEC leader Saudi Arabia.
“It is still expected that the group will come to a deal,” ING Economics said in a note.
Recall that the United Kingdom approved Pfizer Inc’s COVID-19 vaccine on Wednesday, jumping ahead in a global race to start the most crucial mass inoculation program in history.
In the United States, crude stockpiles fell last week, while gasoline and distillate inventories rose sharply as refiners slowed production amid weakening demand, the Energy Information Administration said on Wednesday.
Oil stocks fell by 679,000 barrels in the week to November 27, less than the 2.4 million-barrel decline forecast in a Reuters poll of analysts.
Gasoline stocks increased by 3.5 million barrels, while distillate inventories were up by 3.2 million barrels.
Adding to international supplies, Venezuela’s crude exports almost doubled last month, according to data from the state-run PDVSA and Refinitiv Eikon.
Recall also that the initial meeting held earlier this week was deadlocked as World’s oil producers are struggling to agree on how much crude to pump after global energy demand fell due to pandemic.
The group will resume talks today to agree on how much crude to pump in 2021.