High global oil prices amid anticipation of the production agreement

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Oil prices rose today, as the market awaits an agreement between producers, which dealers expect will include continued curbing of supplies, while Britain’s approval of a vaccine to prevent Covid-19 gave new hope for a recovery in demand.

Earlier, prices were undermined by a sudden increase in oil inventories in the United States, and the uncertainty spread by the postponement of OPEC and its allies for a formal meeting to decide on increasing production from January for two days.

By 15:00 GMT, Brent crude futures were up 34 cents, equivalent to 0.7 percent, to $ 47.76 a barrel, while US West Texas Intermediate crude increased 36 cents, or 0.8 percent, to $ 44.91.

Data from the American Petroleum Institute showed that US crude inventories rose 4.1 million barrels last week, compared to expectations in a poll for a drop of 2.4 million barrels.

The Organization of the Petroleum Exporting Countries (OPEC), Russia and other allies, within the framework of the OPEC + group, have postponed talks on production policy for next year until Thursday, according to sources.

This year, the group implemented production cuts of 7.7 million barrels per day as fuel demand was affected by the Coronavirus pandemic.

Those cuts were widely expected to be extended to the first quarter of 2021 amid spikes in COVID-19 infections.

But the UAE said this week that while it could support the extension, it would find it difficult to continue the same deep production cuts through 2021.

“Energy markets will remain in a state of tension until OPEC + passes tomorrow’s meeting,” said Edward Moya, chief market analyst at Oanda in New York.

He added, “Oil prices will continue to receive support as the vaccine manufacturers announce the dates for the start of vaccinations.”

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