Oil prices dropped on Thursday as the rising number of coronavirus cases continue to raise concerns over oil demand, while positive news on vaccine trials limited further declines.
International benchmark Brent crude was trading at $44.17 per barrel at 0644 GMT on Thursday with a 0.38% decrease after closing Wednesday at $44.34 a barrel.
American benchmark West Texas Intermediate (WTI) was at $41.72 per barrel at the same time for a 0.69% decrease after ending the previous session at $42.01 a barrel.
Oil prices declined as the rapid increase in the number of coronavirus cases obligated several countries worldwide to re-tighten measures and impose fresh lockdowns, fueling concerns over an immediate recovery in the global economy and oil demand.
In the US, schools in New York City will close again due to the growing number of cases, while strict measures will be re-implemented in some states.
-COVID-19 vaccine shot on horizon
Further price declines were limited as the US drugmaker Pfizer and BioNTech announced that it ended its vaccine trial with a 95% success rate, paving the way for a vaccine shot this year.
Companies are planning to submit the vaccine “within days” to the US Food and Drug Administration (FDA) for Emergency Use Authorization (EUA) and share data with other regulatory agencies around the globe.
To positively support prices and limit further declines, US crude oil stocks increased less than market forecasts for the week ending Nov. 13.
According to data released by the country's Energy Information Administration (EIA) 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.
Oil prices hit $45 a barrel on Wednesday after the Organization of Petroleum Exporting Countries (OPEC) and some non-OPEC producer countries, also known as OPEC+, hinted during a ministerial meeting on Tuesday that the current deal on production cuts might be extended or tweaked, if need be, to adapt to changing market conditions.
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. The group is due to pare that further by 2 million b/d starting next year.
Now investors are awaiting the upcoming OPEC+ meetings on Nov. 30 and Dec. 1 for a possible production cut decision, as the world has been struggling with weak oil demand and a supply glut caused by the coronavirus pandemic.
By Sibel Morrow