Oil prices weakened on Friday in quiet trade on account of the United States Thanksgiving holiday, falling amid glut fears and reservations about a vaccine to end coronavirus pandemic.
Brent crude dipped by 10 cents at $47.70 by 08:02 West Africa Time, after easing by 1.7% overnight. West Texas Intermediate (WTI) slipped by 86 cents or 1.9% to $44.85. WTI did not settle on Thursday due to the holiday.
Brent and WTI have climbed by around 6% this week, after AstraZeneca previously declared its COVID-19 vaccine might have 90% efficacy, boosting successful trial results of two others still in the process of development in the scramble to curb the worst pandemic in a century.
Yet questions have been posed over the so-called “vaccine of the world” as scientists in their number have expressed doubts over how robust the results of the trials were.
“With much of oil’s rally in November built on expectation, sentiment and speculative fast money, some sort of correction was long overdue,” Jeffrey Halley, senior market analyst at OANDA said.
“A thin market and the OPEC+ ministers meeting on Monday seem to have been the precursors for traders to lighten bullish positioning.”
The Organisation of the Petroleum Exporting Countries (OPEC) and other producers like Russia that make up the OPEC+ cartel are inclined to delay next year’s proposed upward review of oil output, three sources close to OPEC+ told Reuters.
OPEC was proposing to lift production by 2 million barrels per day (bpd) in January – about 2 per cent of world’s output – as it prepares to scale back this year’s record supply cuts. OPEC+ ministers are to meet from Monday.
Increasing Libyan supply is stoking fears regarding oversupply in the market as people are disregarding lockdown advice and travelling.
Roughly 6 million Americans took air trips from Friday and Wednesday ahead of the Thanksgiving break as they defied advice from the Centres for Disease Control to stay home, said the U.S. Transportation Security Administration.