NEW YORK: Oil prices were little changed on Tuesday as worries that lockdowns to fight a new surge in coronavirus cases could hit short-term demand offset hopes for a vaccine and the possibility of tighter OPEC+ supply policies.
Brent futures fell 7 cents, or 0.2%, to settle at $43.75 a barrel, while U.S. crude gained 9 cents, or 0.2%, to settle at $41.43.
The oil market pared earlier losses in the last 15 minutes of trade after U.S. Federal Reserve Chair Jerome Powell said the Fed was committed to “using all of our tools to support the recovery for as long as it takes until the job is well and truly done.”
Those price moves came ahead of U.S. data from the American Petroleum Institute, an industry group, later Tuesday that is expected to show crude inventories rose 1.7 million barrels last week after gaining 4.3 million barrels in the prior week, according to a Reuters poll.
To tackle weaker energy demand amid a wave of new coronavirus cases, Saudi Arabia called on fellow OPEC+ members to be flexible in responding to oil market needs as it builds the case for a tighter production policy in 2021.
OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC), Russia and others, lowered its outlook on oil demand growth for 2021, according to a confidential document seen by Reuters.
An option gaining support among OPEC+ nations is to keep the existing cuts of 7.7 million barrels per day (bpd) for a further three to six months, sources said, rather than tapering the reduction to 5.7 million bpd in January.
“It’s widely expected OPEC+ will push back on plans to increase production … in January but with the Pfizer and Moderna announcements pushing oil back above $40, there may not be the same support there as there was just over two weeks ago,” said Craig Erlam, senior analyst at OANDA.
OPEC+ held a ministerial committee meeting on Tuesday that made no formal recommendation. The group will hold a full meeting on Nov. 30-Dec. 1.
(GRAPHIC: OPEC+ Scenarios and Impact on Oil Inventories – https://fingfx.thomsonreuters.com/gfx/ce/xklpybqkbvg/OPEC%20Scenarios.PNG)
(Additional reporting by Bozorgmehr Sharafedin in London and Jessica Jaganathan and Roslan Khasawneh in Singapore; Editing by Marguerita Choy and Jason Neely)
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