Oil futures fell Monday, under pressure as the Organization of the Petroleum Exporting Countries and its allied prepared to debate the fate of existing output curbs in the face of a renewed rise in COVID-19 cases in the U.S. and Europe.
But crude was still set to log a large monthly rise in November.
“Oil bulls would like to see an extension of the current reduction of 7.7 million barrels per day for another 6 months. However, this could come at a cost of losing market share to the U.S. shale oil producers,” said Hussein Sayed, chief market strategist at FXTM, in a note.
West Texas Intermediate crude for January delivery CL.1, -0.74% was up 47 cents or 1%, at $45.08 a barrel on the New York Mercantile Exchange. The U.S. benchmark was on track for a 25.9% monthly advance in November, based on the most active contract, according to FactSet.
The global benchmark, February Brent crude BRN00, -1.03% was off 54 cents, or 1.1%, at $47.71 a barrel on ICE Futures Europe. Brent, based on the most active contract, is on track for a 25.7% November rise. The front month, January Brent crude BRNF21, -1.03% was down 58 cents, or 1.2%, at $47.60 a barrel.
OPEC+ agreed in April to cut output by 9.7 million barrels a day, then scaled those reductions back to 7.7 million barrels a day in August. Under the existing plan, the group would bring back another 2 million barrels a day of production in January, but market participants have appeared convinced that step will be delayed, Sayed noted, though the question remains for how long.
Meanwhile, crude has rallied in November, with gains attributed to optimism around vaccine candidates that have shown significant promise in preventing COVID-19 infections in late-stage trials.
At the same time, investors are wrestling with a rising number of COVID-19 cases in the U.S. and Europe, as well as the possibility that U.S. cases could further accelerate following last week’s Thanksgiving Day holiday in the U.S.