TOKYO / SINGAPORE (Reuters) – Oil prices were little changed on Friday, on track for a third consecutive weekly increase, but demand concerns stemming from the surge in coronavirus cases and resumption of lockdowns in several countries have capped earnings.
The prospects of an effective COVID-19 vaccine and the hope that OPEC and its allies will keep production under control have supported oil markets this week.
Brent futures were up 2 cents or 0.05% to $ 44.22 per barrel at 7:30 a.m. GMT.
The more active West Texas Intermediate (WTI) US crude contract in January plunged 4 cents to $ 41.86 a barrel. The WTI contract for December, which expires Friday, was down 3 cents to $ 41.71 a barrel.
“Both contracts continue to consolidate at the high end of their November ranges. However, momentum has declined significantly, and both are now vulnerable to negative stock surprises, ”said Jeffrey Halley, senior market analyst at OANDA.
Both benchmarks are up more than 3% so far this week, the slimmest weekly gains of the past three weeks.
Oil markets slashed weekly gains “as the virus outbreak throws a wet blanket over vaccine optimism,” said Stephen Innes, chief global market strategist at Axi.
“But it all depends on OPEC,” he added.
OPEC +, a group that includes the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, will discuss its production policy at a meeting on November 30 and December 1.
“The next sessions will be choppy. The good news is that there appears to be hope of containing the disease, ”said Sukrit Vijayakar, director of energy consultancy firm Trifecta.
The market needs to see a slowdown in the increase in daily cases, a reduction in the number of active cases and a growth in demand for petroleum products, he said.
Oil prices were receiving some support from signs of movement on a stimulus deal in Washington after Republican Majority Leader in the US Senate, Mitch McConnell, agreed to resume talks on providing more COVID relief -19 as cases multiply in the United States.
However, concerns over oversupply continue to weigh, as Libya has raised production to pre-blockade levels by 1.25 million bpd.
Report by Aaron Sheldrick in TOKYO and Koustav Samanta in SINGAPORE; Editing by Lincoln Feast and Jacqueline Wong