By Adedapo Adesanya
The Brent crude price appreciated by 81 cents or 1.83 per cent to trade at $45.01 per barrel at the global market on Friday supported by investors showing confidence that the Organisation of the Exporting Countries and its allies (OPEC+) will keep production in check.
This also boosted the price of the West Texas Intermediate (WTI) crude yesterday, rising by 43 cents or 1.03 per cent to trade at $42.17 per barrel.
The group, which meets on November 30 and December 1, is looking at options to delay by at least three months from January the tapering of the 7.7 million barrels per day supply ceiling it agreed in April by around 2 million barrels per day.
Members of OPEC+ are, however, leaning towards delaying the current plan to boost output and are considering a possible delay of three or six months.
Producers met on Tuesday but made no formal recommendation. While the OPEC+ Joint Ministerial Monitoring Committee meeting did not agree a way forward, the group signalled that the slash in production may be extended into 2021, which would help prevent oversupply in the global oil markets.
This is coming as efficacy for coronavirus vaccines reached a welcoming level. During the week, Moderna said its vaccine against COVID-19 was strongly effective, further changing the course about the potential of controlling the global pandemic.
The news came exactly a week after Pfizer and BioNTech announced broadly similar results. The Moderna vaccine reduced the risk of COVID-19 infection by 94.5 per cent.
Oil prices were getting some supports from signs of movement on a stimulus deal in Washington after US Senate Republican Majority Leader, Mr Mitch McConnell, agreed to resume discussions on providing more COVID-19 relief as cases surge across the United States.
The market is, however, still worried about oversupply concerns as Libya has raised production to pre-blockade levels of 1.25 million barrels per day.
The country’s National Oil Corporation (NOC) said it had restored output to the level which has not been seen since eastern forces imposed an eight-month blockade in January that affected oil exports.
This compares with around 1.2 million barrels per day at the end of last week and around 100,000 bpd in early September and could reach 1.3 million barrels per day in the next few weeks.
Libya’s faster than expected recovery means trouble for OPEC+ who have been curbing output this year to reduce bloated oil inventories and now with renewed lockdowns in several countries to limit the spread of the coronavirus, the market remains under threats.
Modupe Gbadeyanka