By Sonali Paul
MELBOURNE (Reuters) - Oil prices rose in early trade on Thursday, taking the week's gains to more than 12% on growing hopes that the world's major producers will hold off on a planned supply increase as soaring cases of COVID-19 dent fuel demand.
Algeria's energy minister said on Wednesday that OPEC+ - grouping the Organization of the Petroleum Exporting Countries (OPEC) and other suppliers including Russia - could extend current production cuts of 7.7 million barrels per day (bpd) into 2021, or deepen them further if needed.
The weakening outlook has piled pressure on OPEC+ to delay a supply increase of 2 million bpd scheduled for January, which the market is now pricing in, analysts said.
U.S. West Texas Intermediate (WTI) crude (CLc1) futures climbed 35 cents, or 0.8%, to $41.80 a barrel at 0130 GMT, while Brent crude (LCOc1) futures rose 31 cents, or 0.7%, to $44.11 a barrel.
Both Brent and WTI have soared this week, lifted by hopes that the global coronarivus pandemic can be brought under control after initial trial data showed an experimental COVID-19 vaccine being developed by Pfizer Inc (N:PFE) and Germany's BioNTech (DE:22UAy) was 90% effective.
"It's great news, no question about that ... But it will take time for vaccines to be rolled out, and therefore it will take time for demand to be positively impacted by that," said Lachlan Shaw, National Australia Bank (OTC:NABZY)'s head of commodity research.
In the meantime, fuel demand is under pressure from rising infections in Europe, the United States and Latin America. As a result, OPEC has said demand will rebound more slowly in 2021 than previously thought.
"In many ways the market is looking forward into 2021, to a time when we do have vaccines rolling out, and to a time where OPEC and allies have held back some of those scheduled supply increases," National Australia Bank's Shaw said.