Oil prices dipped on Thanksgiving Thursday, slipping from seven-month highs as Baker Hughes reported another increase in the number of available rigs
The price rally of the last few days pushed oil prices to seven-month highs, largely on the back of positive Covid-19 vaccine news that promises to hoist oil demand. Traders remain hopeful that the strong efficacy of several vaccine manufacturers will quickly increase oil demand, which has slumped since March as a direct result of the slump in activity due to lockdowns throughout the world.
Along with the rise in WTI and Brent prices, oil stocks received a similar boost. US .o.il majors Exxon and Chevron both received a bump as the price of WTI rose. Shares in Exxon rose from sub-$37 to near $42 in just a matter of days. But the price rally here started to show signs of fatigue into Thursday.
Chevron’s (CVX) share prices, too, enjoyed a boost, from just below $86 to near $95 by Wednesday. Thursday brought a similar fate to the U.S. major, as prices sagged back to near $92.
On Thursday at 8:14 a.m. EDT, the price of WTI slumped to $45.08. down 1.38% on the day. Brent crude fell 1.44% to $47.91 on the day. Both benchmarks remain up on the week.
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Despite signs from the API that crude oil inventories rose by 3.8 million barrels when analysts were predicting a much smaller build, the vaccine effect pushed oil prices ever higher. The EIA reported a day later that crude inventories had drawn down by 800,000 barrels, not increased.
But Baker Hughes on Wednesday, reporting earlier due to the holiday, showed no signs that drilling activity in the United States was waning. Primary Vision’s weekly data took it a step further, showing that completion crews—the frac spread count as it is referred to in the industry—had also risen.
Prices next week are expected to react to OPEC news, as OPEC and OPEC+ meets on November 30 and December 1 to discuss the path forward as it pertains to the production quotas for each member.
By Julianne Geiger for Oilprice.com
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