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Futures Movers

Nov. 27, 2020, 3:08 p.m. EST

Oil prices end mixed Friday but both grades log sharp weekly gain

Mark DeCambre

Crude-oil futures on Friday finished mixed ahead of an important OPEC meeting, after settling on Wednesday at the highest level since early March.

U.S. financial markets were closed Thursday for the Thanksgiving holiday and energy markets settled early, at 1:30 p.m. Eastern Time, on Friday.

West Texas Intermediate crude for January delivery  was down 18 cents, or 0.8%, to end at $45.53 a barrel on the New York Mercantile Exchange, after a 1.8% gain on Wednesday.

January Brent crude , the global benchmark, however, climbed 38 cents, or 0.8%, to settle at $48.18 a barrel on ICE Futures Europe, following a 1.6% gain for grade oil in the previous session.

For the week, WTI gained 7.3% for its largest one-week gain since Oct. 9 and its fourth straight gain, while Brent picked up 7.2%, and also notched a fourth weekly rise in a row, according to Dow Jones Market Data.

On Wednesday, both benchmarks finished at the highest since March 5 and both are on pace for sharp weekly and month-to-date gains. WTI and Brent oil were on track for a weekly rise of around 7%, and the pair rose by at least 27% climb in November thus far, FactSet data show.

The Organization of the Petroleum Exporting Countries and its allies, including Russia, a group known as OPEC+, was leaning toward delaying next year’s planned increase in oil output, according to a Reuters report . However, tensions among OPEC members and allies about an extension of current supply curbs have resulted in the scheduling of a two-day virtual gathering starting Nov. 30.

Oil has benefited from growing hope that vaccines for COVID-19 will help to improve demand trends in the economy that had been weakening due to the impact of the pandemic on business activity.

However, some cautious strategists say that oil my face headwinds after its brisk run-up and as concerns grow about the experimental vaccines that have emerged.

U.S. officials recently raised doubts about the efficacy of a vaccine candidate jointly created by AstraZeneca (NAS:AZN) and Oxford University. Chief of the White House’s Operation “Warp Speed,” Moncef Slaoui, and others in the U.S. expressed concern about aspects of the late-stage study.

“Vaccine setbacks are not good news for the market and a price decline would be more direct should the OPEC+ meeting be further ahead in time,” wrote Rystad Energy’s head of oil markets, Bjornar Tonhaugen.

However, if indeed AstraZeneca’s vaccine sees official delays “in regulatory approvals, this will impact the market which has betted on an earlier oil demand recovery, hoping that the world will be able to travel freely again earlier than expected,” the analysts wrote.

Oil prices gathered steam during the early part of the week as the Energy Information Administration said U.S. crude inventories fell by around 800,000 barrels last week. The EIA, however, reported a larger-than-expected 2.2 million barrel rise in gasoline inventories. Distillate stocks fell 1.4 million barrels last week, according to the EIA.

In other energy assets, December gasoline  shed 55 cents, or 0.4%, to settle at $1.2820 a gallon, but still marked a 9.1% weekly gain. December heating oil  lost 61 cents, or 0.4%, to finish at $1.3805 a gallon, putting in a 7.3% gain for the the week.

January natural gas , the front-month contract, fell 11.80 cents, or 4%, to $2.8430 per million British thermal units but still managed a 2.6% weekly advance based on the most-active contract.

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