Oil up on OPEC+ supply cuts hopes

Oil was up on Monday morning in Asia, as investors anticipate <a href=’https://theenergyyear.com/companies-institutions/opec/’>OPEC+ keeping the current supply restrictions in place well into 2021. However, falling demand due to COVID-19 continues to weigh on the market.

Brent oil futures rose 0.98% to $43.20 by 11:52 PM ET (3:52 AM GMT) and WTI futures jumped 1.32% to $40.66. Both Brent and WTI futures remained above the $40 mark.

Oil has started the week on a positive note, with prices in Asia pushing up. Much of the support for the buoyancy comes from investors expecting supply to continue being restricted. The Organization of Petroleum Exporting Countries and their allies (OPEC+) are due to meet on Nov. 30 to Dec. 1 to decide the group’s future policies.

OPEC+ is widely expected to maintain the 7.7 million barrels per day (bpd) curb that have been in place since August. The body’s Joint Technical Committee meeting, which will meet later in the day, and the Joint Ministerial Monitoring Committee due to meet on Tuesday, are expected to provide more clarity about the group’s intentions.

Oil production by Libya has now reached 1.2 million bpd, pushing supply up and weighing on prices; the country had been under an almost total eight-month embargo until September.

Demand woes continue to be a negative force on the market, with vehicle traffic in both Europe and the U.S. slowing. Europe is particularly affected:

“European motorway traffic is down almost 50% in recent weeks in some countries (such as France) as lockdown measures are increased,” ANZ analysts said to Reuters.

COVID-19 vaccine developments are also helping to buoy prices, with several major vaccine makers expected to deliver data on their vaccine candidates in the near future.

First published on Investing.com