Oil set for third week of gains on vaccine hopes

LONDON: Oil prices firmed on Friday, and were on track for a third consecutive weekly rise, buoyed by successful COVID-19 vaccine trials, while renewed lockdowns in several countries to limit the spread of the virus capped gains.

Prospects for effective COVID-19 vaccines and hopes OPEC and its allies will keep production in check have bolstered oil markets this week.

Brent crude futures were up 28 cents, or 0.6pc, at $44.48 a barrel at 1027 GMT.

The more active U.S. West Texas Intermediate (WTI) January crude contract gained 17 cents, or 0.4pc, to $42.07 a barrel. The WTI contract for December, which expires on Friday, was up 2 cents at $41.76.

Both benchmarks are up more than 4pc so far this week.

"Concerns about demand, which have been weighing on prices since the spring, are now giving way to hopes of economic recovery, thanks in part to the imminent rollout of vaccines ..." Commerzbank said.

Prices also found support from expectations the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers - a group known as OPEC+ - will delay a planned production increase.

The group, which meets on Nov. 30 and Dec. 1, is looking at options to delay by at least three months from January the tapering of their 7.7 million barrel per day (bpd) cuts by around 2 million bpd.

"An assumed roll-over of current cuts by OPEC+ to Q1 2021 is probably in today's price of $44/barrel," Nordic bank SEB said.

Oil prices were getting some support from signs of movement on a stimulus deal in Washington after U.S. Senate Republican Majority Leader Mitch McConnell agreed to resume discussions on providing more COVID-19 relief as cases surge across the United States.

Oversupply concerns, however, continue to weigh as Libya has raised production to pre-blockade levels of 1.25 million bpd.