WTI Rebounds Sharply on Delayed OPEC+ Production Growth

WikiFX News (16 Dec.) - WTI on Tuesday rebounded sharply 2% to the intraday high of $47.73. Markets are betting that OPEC+ will delay planned production increase amid positive dynamics of Brexit and stimulus bill.

Various countries have imposed severe restrictions amid the resurgence of Covid-19. As a result, the International Energy Agency (IEA) cut its oil demand estimates for 2020 and 2021 in its latest monthly market report published on Tuesday. It also believes the looming uncertainty over the vaccines will keep oil demand weak in the short term.

With that said, the IEA called on OPEC+ members to reduce oil production. Meanwhile, Abdelmajid Attar, who holds OPECs rotating presidency, said there was no guarantee the group and its allies would raise crude production by April, indicating chances of OPEC+ to delay production increase or even cut oil production.

Whats more, further boosts for oil prices are on track. The US two parties are expected to reach a deal on a stimulus package. The UK on Tuesday watered down its stance on fishing, while the EU also agreed to compromise on the structure of the fisheries agreement.

Notably, the EIAs oil inventory report will come out during the day, in which a large increment could limit the further strength of oil prices.

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Chart: Trend of WTI Crude Oil