By Saket Sundria and Alex Longley
Futures fluctuated between gains and losses near $41 a barrel. The IEA cut its forecasts for global oil demand this quarter by 1.2 million barrels a day as the pandemic continues to pressure consumption, most notably in Europe.
The weakness adds to the challenges faced by OPEC+ when it meets at the end of the month to decide whether to delay an output hike in January. The producer group is considering maintaining its existing cuts for an extra three to six months, according to several delegates, asking not to be identified because the talks are private.
Oil has surged almost 12% this week with most of the gains coming after news of a Covid-19 vaccine breakthrough. However, the coronavirus continues to spread in Europe and the U.S. and a global stock market rally was showing signs of stalling on Thursday.
“The vaccine is not yet here and the oil market is not out of the woods either,” said Bjarne Schieldrop, chief commodities analyst at SEB AB.
The Organization of Petroleum Exporting Countries and its allies are currently keeping about 7.7 million barrels a day off the market and the uncertainty around when a vaccine might be available is complicating its decision on production levels. The group is also facing rising supply from Libya and a potential boost in production from Iran next year.
“The easiest thing for them to do is to roll it over,” Daniel Yergin, vice chairman at IHS Markit, said in Bloomberg Television interview.
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