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(Updates prices, adds latest news on OPEC+)
By Bozorgmehr Sharafedin
LONDON, Nov 25 (Reuters) - Oil prices climbed for a fourth
straight session on Wednesday, shrugging off a report showing
U.S. crude inventories rose more than expected and extending a
rally driven by hopes that a COVID-19 vaccine will boost fuel
demand.
Brent crude rose 43 cents, or 0.9%, at $48.29 a
barrel by 1442 GMT, adding to a 4% gain the previous session.
U.S. West Texas Intermediate crude gained 53 cents,
or 1.2%, to $45.44, after rising more than 4% on Tuesday.
"Crude oil prices are trading at their highest levels since
early March, supported by positive market sentiment as a result
of vaccine news and strong oil demand in Asia," said UBS oil
analyst Giovanni Staunovo.
"We maintain our bullish outlook for next year and target
Brent to hit $60 per barrel at the end of 2021," he added.
AstraZeneca said on Monday its COVID-19 vaccine
could be up to 90% effective, providing another weapon in the
fight to control the pandemic.
A weaker dollar also supported crude prices as a lower
greenback makes oil less expensive for buyers holding other
currencies.
"The recent depreciation of the U.S. dollar has helped
temper the impact of surging oil prices for some of the world’s
largest consumers of energy," said Stephen Brennock of broker
PVM.
Brent has moved into backwardation, a market structure in
which oil for immediate delivery costs more than supply later.
Backwardation encourages inventories to be drawn down and
suggests lingering fears about a glut have receded.
Brent futures for February delivery were trading 13 cents
above January contracts <LCOc1-LCOc2>, the highest since July.
Investors were unpeturbed by Tuesday's data from the
American Petroleum Institute (API) showing U.S. crude stocks
rose by 3.8 million barrels in the week to Nov. 20 to around 490
million barrels, a higher level than forecast.
Official U.S. inventory data is due out on Wednesday.
"Positive vaccine news and swift deployment views are behind
a significant part of this move in the curve, supported by
increasingly firm beliefs by the market that OPEC+ will extend
its current output targets for Q1 2021," said Rystad Energy’s
analyst Bjornar Tonhaugen.
OPEC+, made up of the Organization of the Petroleum
Exporting Countries (OPEC) and allies including Russia, is
leaning towards delaying next year's planned increase in output
despite a rise in prices, three sources close to OPEC+ said.
(Reporting by Bozorgmehr Sharafedin in London; additional
reporting by Aaron Sheldrick in Tokyo; Editing by Jason Neely
and Edmund Blair)
