Crude oil futures settled moderately higher on Thursday after the Organization of the Petroleum Exporting Countries (OPEC) and their allies announced their decision about output cuts.
The OPEC+ announced today that they have reached an agreement to pare current production cuts of 7.7 million barrels per day to 7.2 million barrels per day from January.
The decision will result in an increase of 500,000 barrels per day. Still, the decision by OPEC+ to hold monthly meetings to “assess market conditions and decide on further adjustments for the following month” is expected to help in balancing the oil market. The members decided that such monthly adjustments will not be by more than 0.5 million barrels per day.
West Texas Intermediate Crude oil futures for January ended higher by $0.36 or about 0.8% at $45.64 a barrel.
Brent crude futures were up $0.60 or 1.23% at $48.85 a barrel a little while ago.
Data from Energy Information Administration (EIA) on Wednesday that showed crude inventories in the U.S. fell by 679,000 barrels last week, contributed a bit as well for the uptick in oil prices.
On the Covid-19 front, Britain approved Pfizer Inc’s Covid-19 vaccine on Wednesday, clearing the way for mass inoculation.
The U.S. FDA is holding its advisory committee next week to confirm a vaccine rollout plan, while the European Medicines Agency is likely to give emergency approval on December 29th.