Oil reportedly rose for the fourth day in a row on Wednesday. This ignores industry reports showing a higher-than-expected increase in U.S. crude stockpiles. Rising prices amid rising stock is an interesting thing since usually, the condition is different.
It also extended the rally driven by expectations that the Covid-19 vaccine will increase fuel demand. The bottom line is that the world economy is predicted to recover if a vaccine is found. So far there have been several vaccines that show positive progress.
The examples are from Pfizer, Moderna, and AstraZeneca. They were reported to have more than 90% effectiveness level without any serious impacts. However, they still need more time to get further clinical tests until ready to be produced massively.
Oil Commodity Improvement Data
Brent crude rose as much as 54 cents or 1.1%. It was priced at $48.40 per barrel by 0247 GMT. The condition occurred after rising by almost 4% in the previous session. WTI or West Texas Intermediate crude was reported to rise 47 cents or 1.1% to $45.38 a barrel.
Both contracts have been at their highest levels since early March and have gained nearly 10% in the past four days. Kevin Solomon, energy economics analyst at StoneX said that the broader market is in the de-risk mode now. This is related to the corona vaccine.
We all now have three effective vaccines that can combat the virus. AstraZeneca on Monday gave an update that its Covid-19 vaccine is 70% effective in trials and can be effective up to 90%. Just like Pfizer and Moderna, there is no serious condition as the impact.
The discovery provided ammunition for controlling the pandemic after positive results from other major pharmaceutical developers. It is hoped that later this kind of discovery will be able to break the link of virus transmission and be able to make the world normal again.
The viable vaccines are probably not ready for mass use in the next few months. This means that lockdowns and travel restrictions will be in place until next year. In fact, nowadays some countries have started doing it a second time.
Steps that OPEC+ will take
Various virus-related conditions and their handling allow OPEC+ to take further steps. The organization, which groups the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, is likely to continue production cuts until 2021.
The decision could be taken after a meeting that will begin on November 30 after technical talks this week. OPEC+ producers have been holding back supply. The goal is to support prices after the lockdown pandemic earlier this year which led to a drop in demand.
They will currently increase production by 2 million barrels per day. This means about 2% of global demand before the pandemic began to exist in the world. The increase in production will reportedly begin in January next year. This is a big decision that is expected to work.
Meanwhile, Gold is Rebounding
Elsewhere, gold has rebounded due to an unexpected rise in U.S. jobless claims. That halted the previous day's rally on Wall Street. The precious metal bounced off a sharp drop to $1,800 in the previous session. Spot gold reportedly rose 0.2% to $1,810.41 an ounce.
The situation came a day after reaching its lowest level since July 17 at $1,800.01. U.S. gold futures also rose 0.3% to $1,809.10. Meanwhile, the S&P 500 and Dow retreated amid a possible slowdown in the labor market recovery. On Tuesday, Wall Street strengthened.
This is due to advances in vaccine discovery and a smooth White House transition that supports a faster economic recovery. Unemployment data supporting gold and a weak dollar also boosted the commodity by making it cheaper.
