On Monday, oil prices hiked as the market went optimistic over the economic rebounds from Japan and China along with the hopes that OPEC+ will maintain the current level of output curb.
By 07.23 GMT, Brent crude oil futures for January climbed by 1.3% or 54 cents to USD43.32/barrel while the US WTI rose by 1.6% or 63 cents to USD40.76/barrel.
The figures from China and Japan showed economic rebounds which supported prices, as well as the report that on a daily basis, Chinese refineries processed record-high crude in October.
Meanwhile, the Organization of Petroleum Exporting Countries and its non-member oil producer allies (OPEC+) is estimated to keep the oil production cuts instead of increasing output by 2 million bpd starting in January.
OPEC+ is scheduled to hold a meeting of its ministerial committee on Tuesday. The market estimated that there would be changes to the production quotas recommended in the meeting.
Nevertheless, challenges to the current oil price level remain. The faster-than-estimated increase of Libyan oil supply, along with the reimposed coronavirus-related lockdown in Europe and the US are amongst the factors.
Other than that, Baker Hughes said that last week, the US oil and natural gas rig count climbed to the highest level since May on the back of higher crude prices.
Going forward, ANZ analysts predicted the oil surplus to climb to between 1.5-3 million bpd in the first half of 2021. Vaccines on the coronavirus will only boost demand in the second half.
