|
A
bipartisan $908 billion coronavirus aid plan gained momentum in
the U.S. Congress.
Brent settled up 54 cents or 1.11% at $49.25 a barrel. During
the session, the contract hit its highest since early March at
$49.92. West Texas Intermediate rose 62 cents to $46.26 a
barrel, after touching a high of $46.68 a barrel.
Both benchmarks gained for a fifth consecutive week, with Brent
up 1.7% and U.S. crude up 1.9%.
"We're higher, despite super bearish events - it's all about
stimulus," said Bob Yawger, director of energy futures at Mizuho
in New York. "You can't go home short this weekend because they
could sign a deal this weekend."
OPEC+, comprising of the Organization of the Petroleum Exporting
Countries and its allies, on Thursday agreed on a compromise to
increase output slightly from January but continue the bulk of
existing supply curbs to cope with coronavirus-hit demand.
OPEC and Russia agreed to ease deep oil output cuts from January
by 500,000 barrels per day with further as yet undefined
increases on a monthly basis, failing to reach a compromise on a
broader policy for the rest of 2021.
OPEC+ had been expected to continue existing cuts until at least
March, after backing down from plans to raise output by 2
million bpd.
The increase means the group will reduce production by 7.2
million bpd, or 7% of global demand from January, compared with
current cuts of 7.7 million bpd.
While some analysts saw an undersupplied oil market even under
the new higher supply quotas, others expected the barrels would
tip the market into oversupply.
Wood Mackenzie analysts, for example, expect that if the
increases continue through March, there might be 1.6 million bpd
unwanted in the first quarter.
The premium of Brent crude futures for nearby delivery to future
months is at its highest since February, a structure called
backwardation, which usually points to supplies tightening up
and suggests receding fears of a current glut.
U.S. production, meanwhile, has recovered from the
two-and-a-half-year lows touched in May mainly because shale
producers have brought wells back online in response to rising
prices.
The U.S. oil rig count rose five to 246, its highest since May,
energy services firm Baker Hughes Co said.
Money managers raised their net long U.S. crude futures and
options positions in the week to Dec. 1, the U.S. Commodity
Futures Trading Commission (CFTC) said.
(Additional reporting by Aaron Sheldrick and Shadia Nasralla;
Editing by Marguerita Choy and Elaine Hardcastle)
[© 2020 Thomson Reuters. All rights
reserved.] Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
