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Oil drops as supply concerns, vaccine doubts sap rally

CommoditiesNov 27, 2020 03:10AM ET
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© Reuters. FILE PHOTO: The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County

By Aaron Sheldrick

TOKYO (Reuters) - Oil prices were lower on Friday in quiet trade due to the U.S. Thanksgiving holiday, dropping amid concerns about oversupply and doubts about a vaccine to end the coronavirus pandemic.

Brent crude was down by 31 cents, or 0.7%, at $47.49 by 0758 GMT, having fallen 1.7% overnight. West Texas Intermediate was down by $1.02, or 2.2%, at $44.69. U.S. crude prices did not settle on Thursday due to the holiday.

Both benchmarks have risen about 6% this week after AstraZeneca (NASDAQ:AZN) said that its COVID-19 vaccine could be up to 90% effective, adding to successful trial results of two others under development in the fight to end the pandemic.

But questions have been raised over the "vaccine for the world", with several scientists sounding 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," said Jeffrey Halley, senior market analyst at OANDA.

"A thin market and the OPEC+ ministers meeting on Monday seem to have been the precursors for traders to lighten bullish positioning," he said.

The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia that make up the OPEC+ grouping are leaning towards delaying next year's planned increase in oil output, three sources close to OPEC+ said.

OPEC+ was planning to raise output by 2 million barrels per day (bpd) in January - about 2% of global consumption - as it moves to ease this year's record supply cuts. OPEC+ ministers are due to meet from Monday.

Rising Libyan output is contributing to concerns about oversupply in the market as many people are ignoring lockdown advice and travelling.

Nearly 6 million Americans took air trips from Friday to Wednesday in advance of the Thanksgiving break as they ignored advice from the Centers for Disease Control to stay home, the U.S. Transportation Security Administration said.

Oil drops as supply concerns, vaccine doubts sap rally
 

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Comments (7)
Steve Thembinkosi
Steve Thembinkosi Nov 27, 2020 5:08AM ET
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cad ddnt move
David Acevedo
David Acevedo Nov 27, 2020 3:01AM ET
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Here we go again. Media trying to change the oil market. Why is the article focusing on the one vaccine, did we forget there are other vaccines?
Space Lord
Space Lord Nov 27, 2020 2:49AM ET
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vaccine doubts 🤣
Ursa Minor
Ursa Minor Nov 27, 2020 2:40AM ET
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vaccine doubts? usd is down vaccine hopes While Oil is down on vaccine doubts? are you kidding me?
Jesse Mulliniks
Jesse Mulliniks Nov 27, 2020 1:42AM ET
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Oil demand is at record lows. The “vaccine news pump” was a joke.
Tommy Arencibia
Tommy Arencibia Nov 27, 2020 1:39AM ET
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Typical from Reuters
Lake Lot
Lake Lot Nov 26, 2020 10:43PM ET
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The traveling public will die . Darwin !
 
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