By Adedapo Adesanya
Crude prices continued to trade higher with the Brent gaining 61 cents or 1.39 per cent to sell for $44.36 per barrel at the market on Wednesday.
The rise in the value of the commodity was supported by a smaller-than-expected increase in the United States crude stockpiles last week, which also pushed the price of the West Texas Intermediate (WTI) crude higher by 36 cents or 0.87 per cent yesterday to $41.73 per barrel.
At the midweek trading session, the Energy Information Administration (EIA) reported a moderate 800,000 barrels increase in crude oil inventories for the week to November 13, after the American Petroleum Institute (API) estimated a 4.17 million barrels inventory build.
The EIA estimate for last week compares with analyst expectations for a build of 1.95 million barrels. After last week, the authority reported a considerable increase in inventories, at 4.3 million barrels.
Oil has been trending higher overall since last week based on news of vaccines for the deadly COVID-19 which has battered demand. Pfizer was the first to make an announcement of a cheering results from its Phase 3 vaccine trial, which pushed prices up because of the hopes of things going back to normal.
It continued into this week as Moderna announced potentially strong efficacy result of 94.5 per cent from its own late-stage vaccine trial, adding that it had enrolled more than 30,000 participants in the United States.
A vaccine for many people around the world will unlikely be available until late into 2021, but the oil market has so far shown its optimism.
Other bullish news that helped oil prices is the hopes that the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) will decide to postpone its planned production increase in January.
OPEC and its allies led by Russia, have been cutting production by about 7.7 million barrels a day and plans to increase output by 2 million barrels per day from January 2021. 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. The group is due to discuss policy at a full ministerial meeting to be held on November 30 and December 1.
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