Could oil prices continue their upward trend?
More vaccine hope appears to be having a positive influence on oil movements.
On Monday 23rd November, WTI prices teased $43 per barrel, apparently due to further progress on vaccination is injecting optimism into oil markets.
There is fresh, positive vaccine news from the UK. AstraZeneca reports its Covid-19 vaccine is 70% effective, helping instil confidence that an uptick in oil demand will come on mass vaccination.
While the 70% efficacy rate is lower than say Pfizer BioN Tech’s 95% successful product, AstraZeneca’s solution is thought to be much more scalable. It could be rolled out much quicker, and take effect faster, which in turn could play into higher oil demand next year.
Away from vaccines, it looks like armed strikes on oil production facilities in both Saudi Arabia and Libya have helped put a bid under oil.
Yemeni Houthi rebels are claiming responsibility for a missile attack on a Saudi Aramco facility in Jeddah. While Aramco has stated it plans to continue operations at the facility with no major disruption, this was still enough to give WTI and Crude a positive bump.
Traders also got word of an attack by militants on Libya’s National Oil Corporation headquarters in Tripoli on Monday. The attack was quickly repulsed, but oil did show signs of strength opening slightly higher that day, following the news.
So, is the outlook optimistic? It’s possible. WTI is already trading above $43 as of Tuesday 24th November, so it appears the markets are looking positive.
On Monday 30th November, OPEC and allies will sit down for a fresh round of talks. As we’ve previously reported, the organisation is considering extending its production cuts to help stabilise oil prices.
Currently, OPEC plans to taper production by 2m barrels per day in January. Now, it is discussing no taper until the spring, with an extended production cut timeframe of 3-6 months.
Natural gas appears to be on a small rebound.
After a warmer November, December is forecast to be colder. Total U.S. consumption of natural gas rose by 22.8% compared with the previous report week, according to data from the EIA.
That suggests higher demand via heating buildings, which should have a solid impact on prices.
A storm is brewing in the Atlantic, with a 10% chance it could turn into a tropical cyclone, but it is believed that it will not affect any US East Coast LNG infrastructure.