By Yasin Ebrahim
Investing.com – Crude oil prices rose Friday marking a third-straight week of gains as investors weighed up positive Covid-19 vaccine news against the prospect of further lockdowns souring demand.
On the New York Mercantile Exchange for December rose 41 cents to settled at $42.15 a barrel, while London’s Intercontinental Exchange (NYSE:), gained 59 cents to settle at $44.79 a barrel.
The number of oil rigs operating in the US rose by fell to 231, the first decline in ten weeks, from 236 last week, according to data from energy services firm Baker Hughes.
The fall in oil rigs counts, which often serve as an indicator of future production and demand, comes as oil and gas producers seek to steady output following a pandemic-fueled halt in the second quarter, when oil prices briefly turned negative.
Signs of falling activity, however, were shrugged off as investors bet that a sooner rather than later rollout of a vaccine will speed the reopening of the global economy, ushering in a wave of demand from hard-hit sectors such as air travel.
The ongoing winning streak comes just days after Energy Information Administration (EIA) reported that U.S. stockpiles of crude rose less than expected last week, though gasoline supplies jumped.
Inventories of U.S. crude rose by 0.8 million barrels for the week ended Nov. 13, compared with expectations of 1.65 million barrels. Gasoline inventories – one of the products that crude is refined into – by 2.6 million barrels, confounding expectations for a build of about 0.1 million barrels.
The weakness in fuel demand was attributed to further lockdowns in the U.S. amid soaring Covid-19 cases. Yet, some expect downside in crude prices from lockdowns will likely be temporary amid the ongoing rebalancing of demand and supply in oil markets.
“Any tactical downside in crude will likely be temporary, in our view, pushing back our $65/bbl Brent target into late 2021,” Goldman Sachs (NYSE:) said earlier this week. “We expect the winter Covid wave to delay, but not derail, the oil market rebalancing, with normalized OECD stocks, OPEC+ spare capacity returning to 1Q20 levels, and finally, shale production growth all occurring by 4Q21.”
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