Crude oil prices increased during the week ending Nov. 20 as latest OPEC+ meeting instilled hopes for an extension of the production cuts through 2021 and successful vaccine trials boosted upward sentiment for a sooner-than-expected rebound in oil demand.
International benchmark Brent crude traded at $44.45 at 1307 GMT on Friday, posting a 2.65% increase from Monday when traded at 0738 GMT registered at $43.30 per barrel.
American benchmark West Texas Intermediate (WTI) traded at $42.05 at the same time on Friday relative to $40.73 a barrel on Monday.
Starting the week at $43 a barrel, Brent oil price pushed for $45 a barrel on Wednesday after the Organization of Petroleum Exporting Countries (OPEC) and allies, also known as OPEC+, hinted an extension or tweak on production cuts if needed during a ministerial meeting on Tuesday.
The OPEC+ group, which has curbed output since January 2017 to support prices, is now reducing production by 7.7 million barrels per day (b/d), down from cuts totaling 9.7 million b/d imposed from May 1 to Aug. 1.
As the world has been grappling with weak oil demand and a supply glut triggered by the coronavirus pandemic, the oil market is now awaiting the upcoming OPEC+ meetings on Nov. 30 and Dec. 1 for a potential production cut decision.
Positive developments in vaccine studies also contributed to the uptrend in oil prices as a quicker recovery in pandemic means faster rebound in global economic data and oil demand.
After the US drug maker Pfizer and German biotech firm BioNTech announced last week that their coronavirus vaccine candidate was more than 90% effective, another US biotech firm Moderna announced Monday that its coronavirus vaccine candidate is 94.5% effective, paving the way for a vaccine shot this year.
On Thursday, AstraZeneca announced that its Phase-3 COVID-19 vaccine shows 'encouraging' immune response in older adults.
A smaller-than-expected increase in US crude oil stocks for the week ending Nov. 13 also positively supported the prices.
According to data released by the Energy Information Administration on Thursday, US commercial crude oil inventories rose by 800,000 barrels, or 0.2%, to 489.5 million barrels relative to the market expectation of an increase of 1.7 million barrels.
By Sibel Morrow