(Bloomberg) -- Oil rose toward $41 a barrel in New York as advisers to President-elect Joe Biden ruled out a national lockdown to curb the spread of Covid-19, moving away from measures that would cripple the economy.
One of Biden's top advisers said targeted local measures was the preferred approach to tackling the virus. The pandemic's impact on demand is likely to be a key focus at a meeting on Tuesday of OPEC+'s Joint Ministerial Monitoring Committee, which typically reviews compliance to production cuts. While supply policy won't be set this week, traders will be looking for any indications a planned easing of output curbs from next year will be delayed.
Oil capped its biggest weekly advance since early October on Friday after news of a breakthrough on a Covid-19 vaccine that protects most people, although there is still uncertainty about how quickly it could be rolled out. Meanwhile, confirmed coronavirus cases in the U.S. surpassed 11 million and parts of Europe are back in lockdown, raising concerns about the demand outlook.
OPEC+, which is also facing rising supply from Libya, will gather at the end of November for a larger ministerial meeting that will set policy. Early indications are that the group may delay a planned easing of cuts by three to six months.
"The chatter on OPEC+ will grow increasingly loud over the next two weeks and will be the main driver of oil prices for the rest of November," said Howie Lee, an economist at Oversea-Chinese Banking Corp. The prospect of the U.S. avoiding a nationwide lockdown also removes a key risk for the market, he added.
Brent's three-month timespread was 67 cents a barrel in contango -- where prompt prices are cheaper than later-dated ones -- compared with $1 a week earlier. The narrowing spread indicates concerns about over-supply are easing.
See also: OPEC's Got to Play the Coronavirus Waiting Game: Julian Lee
Meanwhile, Twitter suspended the account of Iranian Oil Minister Bijan Namdar Zanganeh because it violated rules against impersonation, the company said. An official at Iran's oil ministry, who asked not to be named, said the ban appeared to be linked to sanctions.
For more articles like this, please visit us at bloomberg.com
Subscribe now to stay ahead with the most trusted business news source.
©2020 Bloomberg L.P.