Oil climbs higher on China, Japan rebound, hopes for OPEC

Oil climbs higher on China, Japan rebound, hopes for OPEC

Brent crude fell 75 cents, or 1.7 percent, to settle at $42.78 a barrel.

The group is leaning towards postponement of a planned January increase in oil output for at least three months to support prices as the COVID-19 pandemic continues its second wave, sources told Reuters on Monday.

Brent crude futures for January rose 16 cents, or 0.4%, to $43.98 a barrel by 0104 GMT and U.S. West Texas Intermediate crude for December added 13 cents, or 0.3%, to $41.47 a barrel.

For last week, both notched gains of more than 8 percent.

Data released by the American energy services firm Baker Hughes showed that the operating USA oil and natural gas rigs count rose to its highest in the last week since May.

Hurricane Iota becomes category 5 storm as it hurdles toward Central America
Hurricane Iota is the strongest storm of the season and is tracking to be a major imminent threat for Nicaragua and Honduras. The effect of the rains could be particularly devastating in areas already drenched by Hurricane Eta two weeks ago.

"It's no surprise that the market is trimming the price gains today as realities for crude supply and demand are grim, while daily new Covid-19 cases in the USA are setting new records for the third-straight day", Bjornar Tonhaugen, head of oil markets at Rystad, said. United States natural gas futures edged up on Friday as exports continued to hit fresh record highs, and on forecasts for cooler weather and more heating demand in coming weeks.

Data showing a rebound in Chinese and Japanese economies also contributed to the change in prices. Analysts had expected a draw of 913,000 barrels.

Oil prices settled up more than 2% on Monday after trading higher earlier in the day as Moderna Inc said its experimental vaccine was 94.5% effective in preventing COVID-19.

Even with that development, though, oil demand remains shaky. However, its base-case projection is that consumption will be higher than supply in 2021, depleting world stockpiles at a rate of 800,000 barrels a day. The International Energy Agency (IEA) said on Thursday global oil demand was unlikely to rise significantly until well into 2021, even if the vaccine is successful.

OPEC and allies led by Russian Federation, known as OPEC+, were due to raise output by 2 million barrels per day in January as part of a steady easing of record supply cuts. The average LNG price for December delivery into North-East Asia was estimated at between $6.80-$6.90 per million British thermal units (mmBtu).

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