Oil prices increased by more than 1 percent on Wednesday, November 11, after an industry survey by the American Petroleum Institute (API) showed a 5.15 million barrel decrease in US crude oil reserves last week. This greatly surpassed the 913,000 barrels consensus estimate and led to a rise in black gold prices.
A significant part of the positive hopes remains a potential vaccine from Pfizer and BioNTech, which has passed large-scale trials and demonstrated 90 percent efficacy. However, despite the fact that oil prices are underpinned by optimistic vaccine reports, the overall outlook for fuel demand remains unclear as the lockdowns in Europe and the United States are reintroduced.
The increase in cases around the world poses a constant threat to a sustainable recovery in oil demand before a viable, widespread vaccine becomes available. The continued recovery in Libyan manufacturing, meanwhile, remains a complicating factor for OPEC+’s plans to cut production in January.
The potential threat of lifting sanctions against Iran, thanks to the return to the 2015 Tehran nuclear deal, should also be recalled, as Joe Biden has noted. Though stabilized, the situation in the US elections was not fully resolved. The socio-political tension will increase and turn into mass unrest if the current President, Donald Trump, does not continue to accept defeat. The only factor that adds hope is the prospect of a split Parliament that can balance decision-making and “smooth the corners.”
The price of Brent crude oil continues to rise, hitting $44 in yesterday trading.
Gold stocks started a weak turnaround in the direction of growth after breaking down the line of the 50-day moving average. The level of current resistance is $1,900. Stochastic lines are heading towards the oversold region, highlighting a short-term growth potential of the yellow metal. Gold prices dropped -0.08% and are at $1,861.60 per Troy ounce on Wednesday.