Picture used for illustrative purpose. File

Gulf Today Report

Oil advanced on Wednesday as market ignored the rise of US crude stockpiles above expectations due to optimism of COVID-19 vaccine, this is its fourth straight session gain.

Brent crude was up 38 cents, or 0.8%, at $48.24 a barrel by 06:16 GMT it rose by almost 4% in the previous session. West Texas Intermediate crude gained 27 cents, or 0.6%, to $45.18, after rising more than 4% on Tuesday.

 Jeffrey Halley, senior market analyst at OANDA said, "With an orderly Presidential transition in sight, vaccine boosters and expectations that OPEC+ will extend production cuts next week, oil markets completely ignored the unexpected 3.8 million-barrel climb in API US crude inventories." 

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On Monday, AstraZeneca announced a 70% effective in trials vaccine, It could also go up to 90%. This has boosted investors’ confidence as it is the third vaccine.

However, restrictions will spill into next year thereby affecting oil demand because vaccines will not likely be ready before the new year.

That has increased the possibility of OPEC+ cutting production till 2021. OPEC+ producers have cut down supplies to support the pandemic-hit economy.