By Adedapo Adesanya
The Brent crude and the West Texas Intermediate (WTI) stood on opposite sides of the divide during Friday’s trading session at the global oil market.
For the global benchmark, the Brent, it appreciated by 38 cents or 0.79 per cent to sell at $48.18 per barrel, while the United States’ benchmark crude, the WTI, pointed south by 19 cents or 0.42 per cent to trade at $45.52 per barrel.
Earlier in the week, on Wednesday to be precise, both benchmarks finished at the highest level since March 5 and in this week, they have risen by more than six per cent and by 27 per cent in November.
Different factors contributed to this rise, including plans by the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) to delay next year’s planned increase in oil output.
However, tensions among OPEC members and their allies about an extension of current supply curbs have resulted in the scheduling of a two-day virtual gathering.
The group will meet next week (Monday and Tuesday) to discuss the issue of the recent rise in crude oil prices.
in April, the OPEC 13 members and 10 oil producers outside the group agreed to carry out record production cuts of 9.7 million barrels a day. The supply was then reduced from August to 7.7 million barrels per day and this is expected to expire by January.
But due to the current rise in the cases of COVID-19 in Europe and America, there are plans to extend the present cap by three months, which some producers are not happy about.
Another pointer that oil has benefited from is the growing hope that vaccines for COVID-19 will help to improve demand trends in the economy battered by the virus.
With more than 90 per cent efficacy achieved by three vaccine makers, the oil market took the news to use. However, some cautious strategists say that oil my face headwinds after its run-up as concerns about some of the experimental vaccines have emerged.
Analysts noted that vaccine setbacks are not good news for the market and a price decline could follow sooner than expected.
Oil prices gathered steam during the early part of the week as the Energy Information Administration said the US crude inventories fell by around 800,000 barrels last week.
