Oil Price Fundamental Daily Forecast – Mixed as Investors Square Positions Ahead of Next Week’s OPEC+ Meeting

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are putting in a mixed performance on Friday on low post-holiday volume. Earlier in the session, the U.S. futures contract fell more than 1% amid concerns about oversupply and doubts about a vaccine to end the coronavirus pandemic.

At 09:57 GMT, January WTI crude oil is at $45.30, up $0.31 or +0.69% and February Brent crude oil is at $48.10, up $0.46 or +0.97%.

Vaccine Issues Encouraging Profit-Taking

On a slow news day, traders are once again focusing on a coronavirus vaccine, but this time, they appear to be booking profits as several scientists have sounded doubts over how robust the results of trials from AstraZeneca were.

Earlier in the week, both benchmarks jumped about 6% after AstraZeneca announced that its COVID-19 vaccine could be up to 90% effective, adding to successful trial results of Pfizer and Moderna Inc under development in the fight to end the worst pandemic in a century.

However, former pharmaceutical executives in the U.S. raised questions this week over the Oxford-AstraZeneca vaccine candidate. “We believe that this product will never be licensed in the U.S.,” one group of critical U.S.-based analysts wrote this week.

US Crude Stockpiles Fall Unexpectedly, Gasoline Builds:  EIA

U.S. crude oil inventories fell last week, as well as distillate stocks, while gasoline stockpiles rose sharply, the U.S. Energy Information Administration (EIA) said on Wednesday.

Crude inventories fell by 754,000 barrels in the week to November 20 to 488.7 million barrels, compared with analysts’ expectations in a Reuters poll for a 127,000-barrel rise.

Gasoline stocks rose by 2.2 million barrels in the week to 230.2 million barrels, the EIA said, more than forecasts for a 614,000-barrel rise.

Distillate stockpiles, which include diesel and heating oil, fell by 1.4 million barrels in the week to 142.6 million barrels, close to expectations for a 1.6 million-barrel drop, data showed.

Refining utilization rates rose 1.3 percentage points to 78.7% of total capacity.

Short-Term Outlook

We’re looking at a mixed news day as well as mixed price action.

On the bullish side, OPEC and its allies are leaning toward delaying next year’s planned increase in oil output, three sources close to OPEC+ said, but this news has already been priced into the market as the story has been floated for about a month.

Meanwhile, Libyan output continues to rise, contributing to concerns about oversupply in the market as many people are ignoring lockdown advice and travelling.

COVID-19 cases are expected to rise sharply over the next few weeks, in my opinion, as 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. This doesn’t bode well for gasoline demand as it is expected to slip in the coming weeks due to increased coronavirus infections.

A late session break on Friday will likely indicate that traders are squaring positions ahead of next week’s OPEC+ meeting.

For a look at all of today’s economic events, check out our economic calendar.