Brent crude futures reportedly rose to just under $50 a barrel on Friday. This situation occurred because major producers agreed to a compromise to increase production slightly from January. However, they continue most of the existing supply restrictions to cope with demand.
As is known, the demand for these commodities decreased due to the impact of coronavirus. According to market data, Brent was up as much as 53 cents to $49.24 a barrel by 1034 GMT. The figure was recorded after reaching its highest level since early March at $49.92. West Texas Intermediate experienced the same thing.
WT rose as much as 47 cents to $46.11 a barrel. Both benchmarks are set to count gains for the fifth week in a row. OPEC+ measures that decide to reduce supply also play a role in rising oil prices. Today, his policies are still being highlighted.
OPEC and Russia Decisions
OPEC and Russia on Thursday finally agreed to significantly reduce oil production cuts starting Jan. The reduction is 500,000 barrels per day with further increases yet to be determined each month. However, this is not the end of everything.
They also reportedly failed to reach a compromise, particularly on broader policies for the rest of 2021. OPEC+ is expected to continue existing supply cuts until March. The decision may have been taken after earlier backing away from plans to increase production by 2 million barrels per day.
The increase indicates that the Organization of the Petroleum Exporting Countries (OPEC) and Russia (later known as OPEC+) are set to reduce production by 7.2 million barrels/day. This means as much as 7% of global demand starts in January next year.
The number turned out to be smaller. It is especially if you compare it with the current cut of 7.7 million barrels per day. The deal will ensure a decline in crude oil inventories through the first quarter. This was conveyed by SEB analyst Bjarne Schieldrop.
Like Oil, Gold Also Increases
Another important commodity is gold, which increased on Friday morning in Asia. Investors cautiously and optimistically began to look forward to the U.S. stimulus package. Another reason is that Pfizer is rumored to be reducing the number of vaccines to be made.
Gold Futures reportedly rose 0.26% to $1,845.80. It appears from the data that investors are slowly turning to safe-haven yellow metals. Pfizer itself says that it will only produce 50 million doses of BNT162b2. For information, it is a COVID-19 vaccine developed in co-with BioNTech.
Why did both decide to reduce supply? The reduction was finally made after a report on supply chain problems. The number of doses is down from the previous target of 100 million doses. Meanwhile, the proposed $908 billion U.S. stimulus package is slowly starting to gain attention.
It is especially in the U.S. Congress on Thursday. Democrats and Republicans now have until December 11 to reach a consensus. It is especially about the package price tag and preventing government closures. Meanwhile, America is still struggling with the pandemic.
Economic Impact of Covid-19
Inpatient cases there even reached 100,000. Governor Gavin Newson also made policy. Data released a few days ago. The data highlights the economic impacts caused by COVID-19. A total of 712,000 unemployment claims have indeed been filed over the past week.
That means that it is down from the estimated 775,000 claims and the previous week's claims of 787,000. However, still, the number 712000 is a high one. Further labor market data, including manufacturing payrolls and non-farm payrolls, will be due in the near future.
This is what makes the U.S. Federal Reserve and the European Central Bank will meet to take their respective policy decisions. It is hoped that they can make a wise decision and also regulation, especially for next year.
